Kiwifruit boom drives Bay of Plenty land rush

Summary

A fresh wave of kiwifruit orchard conversions is sweeping through Bay of Plenty, with strong returns and growing global demand drawing investors, corporates and existing growers into competition for land. Conrad Headland, a rural sales consultant at Bower Real Estate, said the industry has rebounded strongly after several difficult years and demand 'seems never-ending'. Corporate investors are particularly focused on scale, moving from 10-hectare blocks to 50-hectare blocks, while syndication has become a popular route into orchard ownership.

In the year to October, several agencies sold nine avocado orchards for conversion to kiwifruit, and about 100 horticultural properties changed hands in Tauranga and western Bay of Plenty. Headland said kiwifruit returns have risen to about NZD 200,000 per hectare, compared with about NZD 45,000 per hectare for dairy farms, with activity concentrated in the 'golden triangle' of Te Puke, Pongakawa and Paengaroa, which is expanding. Brent Trueman, a director of Trueman & Co, said buying an existing avocado orchard costs about NZD 350,000 per hectare (excluding redevelopment costs), while dairy or sheep and beef land costs NZD 100,000 to NZD 150,000 per hectare, 'which makes dairy farms attractive'.

Brent Mountfort, president of Federated Farmers Bay of Plenty, said more dairy farms are being converted to kiwifruit, with some farmers carving out land to diversify, and corporates and syndicates appear to be leading the shift: 'it all depends on who can pay the most'. Colin Bond, chief executive of New Zealand Kiwifruit Growers, said horticulture is outperforming many traditional land uses, with the industry forecasting export revenue of NZD 9.5 billion in 2025-26, rising to NZD 10.8 billion by 2029-30, with most of the growth expected to come from kiwifruit, New Zealand's highest-value horticultural export. A Zespri spokesperson said the positive long-term outlook for kiwifruit and rising global demand for high-quality, nutritious kiwifruit are prompting growers and landowners to consider conversions.

Commentary

New Zealand's kiwifruit industry is undergoing a land conversion boom driven by high returns, with dairy farms and avocado orchards in Bay of Plenty switching to kiwifruit. Returns of NZD 200,000 per hectare far exceed the NZD 45,000 per hectare from dairy farms, attracting corporate investors and syndicates, with land transactions active and the golden triangle expanding. The trend reflects growing global demand for high-quality kiwifruit, and Zespri as industry leader supports price premiums through its brand and marketing strategy, with New Zealand kiwifruit export revenue expected to rise from NZD 2.8 billion to form the bulk of total horticultural exports of NZD 10.8 billion by 2029-30.

For NZ SME owners, rising land costs and increased competition may squeeze the viability of small and medium growers, but syndication offers participation opportunities. At the same time, kiwifruit expansion reduces dairy farms, potentially affecting dairy supply and land prices, but land remains in food production, alleviating some concerns. From an international trade perspective, kiwifruit export growth will strengthen New Zealand's position in the premium fruit market, but global supply chain volatility and climate change risks need monitoring.

Businesses should assess opportunities to diversify plantings or serve the kiwifruit value chain, such as providing packaging, logistics or technology solutions.

Keywords: kiwifruit, Bay of Plenty, orchard conversion, avocado, dairy farms, export revenue, Zespri, land prices

Photo by Makalu on Pixabay

Source: SunLive