Monday June 17, 2013
Who is the biggest offshore investor in NZ?
Fears that Chinese investors are buying up swathes of New Zealand assets could be misplaced: Australia is the much larger offshore investor in New Zealand, accounting for more than half of all foreign buying.
A report by consultants KPMG, analysing foreign investment between July 2010 and December 2012, reveals 46% of overseas investment by value came from Australia, while Asia accounted for 16%.
Among Asian countries, Japan (53%) was a bigger investor in New Zealand than China and Hong Kong (33%).
Significant acquisitions made by Japan in the last two years included beverage companies Independent Liquor and Charlies.
North America, Europe and Australia combined account for about 70% of investment.
KPMG analysed Overseas Investment Office approvals for its inaugural Foreign Direct Investment Report.
The research also reveals there were significant levels of investment from unexpected quarters – with Germany, for instance, investing heavily in agribusiness in recent times.
Of the $300 million which German entities have invested here in the past two and a half years, agribusiness accounted for 86%, predominantly in dairy.
Korea appears to have dropped off the radar as an investor in New Zealand, with comparatively few Korean-based deals recorded by the OIO in the period.
KPMG partner corporate finance Justin Ensor says New Zealand remains an attractive environment for offshore investors generally.
“At KPMG we’re regularly engaged with overseas buyers involved with acquisition and due diligence processes – and our experience tells us that inbound investors are maintaining their levels of interest in New Zealand,” he says.
“New Zealand offers lower regulatory hurdles than in other territories, coupled with our stable political and legal environment. The recent uncertainty in Europe has no doubt made us an even more attractive proposition.”
Other highlights from the KPMG report included:
- The largest 11 transactions during the 2.5 year period accounted for approximately 40% of OIO-approved investment.
- While China’s level of foreign investment appears relatively low in recent times, this may be about to change. Recent examples include press announcements over proposed investments in the dairy sector by Yashilli and Yili.
- China, Germany and Sweden have been the most active acquirers of dairy land, accounting for over 70% of dairy land acquired by overseas investors in the last three years.
- The UK and the USA remain the dominant acquirers of land by overseas investors. China is 14th on the list by area acquired over the last three years.