The most prominent buyers were Ingka Investments Forest Assets NZ Ltd and Ingka Investments Management NZ Ltd, part of the Ingka Group, which is the largest Ikea retailer. Between them the two companies have paid $219.6m for 21,650ha of farmland. (Photo: DOMINICO ZAPATA/STUFF)Stuff | 16 May 2025

by Marty Sharpe

More than 95,000 hectares of farm land has been, or is being, converted to forestry by overseas owners who have paid more than $780 million over the past decade.

Figures obtained from the Overseas Investment Office show that most conversions (56 of 112 applications) are on farm land on the east coast of the North Island, between Wairarapa and Gisborne since 2015.

In almost all cases the land being acquired had been used for sheep and beef farming, and sheep and beef breeding and finishing. Some of the land purchased had already been planted in trees, and not all of the farms sold would necessarily be planted in trees.

The total amount of land sold was 95,452ha. The total paid was $781,216,406. The value of seven purchases was undisclosed due to it being confidential.

Seven applications were declined over the 10-year period.

Figures obtained from the Overseas Investment Office show that most conversions (56 of 112 applications) are on farm land on the east coast of the North Island, between Wairarapa and Gisborne since 2015.Supplied

The most prominent buyers were Ingka Investments Forest Assets NZ Limited and Ingka Investments Management NZ Limited, which are part of the Ingka Group, which is the largest Ikea retailer.

Between them the two companies have paid $219.6m for 21,650ha of farmland.

The second largest buy was the Kauri Forestry Limited Partnership, a vehicle of Craigmore Sustainables Group, which has paid $100.5m for 13,800ha of farmland.

When applying to the office to convert a farm to forestry buyers must show that their investment is for commercial forestry, meaning that a crop of trees will be maintained and harvested to provide wood.

Since August 2022 the Overseas Investment (Forestry) Amendment Act has required buyers wanting to convert farms to forestry to satisfy the ‘benefit to New Zealand test’, which allowed decision-makers more discretion.

Craigmore Sustainables Group ceo Che Charteris said most investors were families from Europe who wanted a connection to what they’re investing in, and who had a long-term and realistic view around returns.

“I mean that in terms of land, not necessarily just in land, also food and forestry. They also want to spread things a bit. They could invest in their own back yard, but we’re seen as a very attractive place to invest in,” he said.

“From our perspective, from when we started about 15 years ago, we’ve always had the view that the New Zealand rural sector needs more cash. In New Zealand we’re really good at doing what we do, but we don’t have the capital to sustain what we have and to grow and continue to innovate and evolve,” Charteris said.

“We set out to build a pipeline of equity capital to try and bring it into the rural sector. But that equity had to have the right values. It can’t be quick-win, turn and burn, looking for 13% return type stuff. It’s got to be long-term. And the Overseas Investment Office ensures that happens, because you’ve got to show a net benefit,” he said.

“We have to accept there is a view held by some people opposed to overseas ownership. I’m not so worried about that, to be honest, because I’m confident in what we do,” he said.

“Kauri LP owns the land and forest. Craigmore is the manager and the governor so we appoint the directors. The whole point of the structures we establish is that Craigmore people, who live in the communities in which we operate, are the governors and approve the budgets and have the say on what occurs”.

“Who is in the firing line if something goes wrong? Me, and the other kiwi directors.

“That’s important to me personally because I think you want New Zealanders as much as possible to be responsible for this capital. You make a decision about land use change you have to wear the consequences for it”.

Charteris said he accepted that forestry conversions had an impact on local communities.

In almost all cases the land being acquired was sheep and beef farming, and sheep and beef breeding and finishing. Some of the land purchased had already been planted in trees.Gisborne District Council

“I totally accept that the more you change the underlying land use in any way, be that horticulture or forestry, you are going to change the nature of the community. The biggest thing is the pace of change as opposed to change, because change is inevitable. That’s my feeling any way”.

Federated Farmers national meat and wool chairman Toby Williams said overseas buyers were investing in forestry due to the large profits to be made through carbon credits in the Emissions Trading Scheme (ETS).

Williams, who farms in Tairāwhiti, said forestry did not provide jobs in the short to medium term.

Federated Farmers national meat and wool chairman Toby Williams said overseas buyers were investing in forestry due to the large profits to be made through carbon credits in the Emissions Trading Scheme.David Unwin / Stuff

“In the longer term it provides jobs if and when the trees are harvested, but not as many as sheep and beef farming,” he said.

“I’ve got no issue against forestry. I’ve got 100 hectares of forestry on my own land. But we need to ensure we’re putting the trees in for the right reasons and in places they can be harvested sustainably,” he said.

Williams questioned some of the logic used in assessing the value of existing farms, saying farms had mixes of high quality productive ‘finishing’ land and less productive steeper locations, on which stock fed until they were due to be finished.

Williams, who farms in Tairāwhiti, said forestry did not provide jobs in the short to medium term.Federated Farmers

“It’s really easy to sit in Wellington and say ‘we could do this and earn more revenue from that steep country’ but that’s forgetting that often the cows and ewes that live on that land are turning lower value into higher value when they get finished on the easier country,” he said.

“There’s a lack of understanding around how our farming systems work,” he said.

“At the moment we’re planting whole farms out”.

While there were consents issued requiring harvesting, the offshore companies could offload the land prior to the time of harvest, he said.

Williams questioned some of the logic used in assessing the value of existing farms, saying farms had mixes of high quality productive ‘finishing’ land and less productive steeper locations, on which stock fed until they were due to be finished.WARWICK SMITH / Stuff

“What we’d like to see is a bonding scheme that requires owners who want to divest in an unharvested forest to pay back the carbon credits and the forest can be harvested by someone else,” Williams said.

“These companies are coming in now because it’s a cash cow for them,” he said.

“The big changes we need aren’t with the OIO but with the ETS and how it functions. That would solve a lot of issues. If the best use of this land is production forestry then that should stand on its own two feet without ETS subsidies,” Williams said.

“I’d almost guarantee that if we took away the ETS we wouldn’t see the conversions to forestry that we have been seeing, or will continue to see into the future,” he said.

Manu Caddie, spokesperson for sustainable land use advocacy group Mana Taiao Tairāwhiti.Mana Taiao Tairawhiti

Sustainable land use advocacy group Mana Taiao Tairāwhiti’s spokesperson Manu Caddie agreed.

“The system is fundamentally broken. Those trees will either be harvested or be left to fall over – either way they will create more of the carnage we’ve already seen in Tairāwhiti,” he said.

“Many of them are sitting on large piles of credits and waiting to see whether the carbon price will make risky harvesting unnecessary – that deals with one problem but creates another. These companies are in it for the short-term to make a lot of money from carbon credits then flick them before the plantations become a liability,” Caddie said.