April 2005 decisionsRetrospective consent followed by further Queenstown land purchase Retrospective consent, change in Napier forestry and lifestyle development CDL buys Hamilton land for subdivision
Retrospective consent followed by further Queenstown land purchasePei-Ru Alice Lee as trustee for Fong Wei Heng of Singapore has retrospective approval to acquire 50% of Henley Downs Holdings Limited for $1,150,000 from her husband Peter Fong of Singapore. Henley Downs Holdings owns 706 hectares at Henley Downs, State Highway 6, Queenstown, Otago.
The OIC states:
On 3 December 1996 consent was granted for Brian Chang and Peter Kulkasetr (also known as Peter Fong) to acquire 100% of the specified securities of Henley Downs Holdings Limited (Henley), a company that owns approximately 706 hectares located south-east of Queenstown. A residential development is proposed for the land.
As part of an estate planning exercise, Peter Fong transferred 50% of the shares in Henley on 27 November 2000 to his wife Alice Pei-Ru Lee as trustee for their son, Fong Wei Heng. An application for consent was not filed at the time, due to an inadvertent oversight on part of the solicitors acting for Mr Fong. [Decision number 200510050.]
Fong has bought land and other property extensively in the Queenstown region. In February 2000, he was given approval to acquire one of the blocks being sold from Closeburn Station on the Glenorchy-Queenstown Road, Queenstown, Otago. In September 2000, he transferred ownership of the property to his children: W.H. Fong of Singapore (50%), M.W.L. Fong of Singapore (16.67%), C.W.L. Fong of Japan (16.67%), and L.W.Y. Fong of Hong Kong (16.67%). The Closeburn station is owned by J. F. Investments Ltd, which is 70% owned by David Salman of Indonesia and 30% by D. Broomfield of Aotearoa. They were subdividing nine hectares of the station as “lifestyle properties” into 27 residential allotments, each of which have a share of the remaining approximately 999 hectares which is farmed. Fong is also a shareholder with Salman and Broomfield in Woodlot Farm Ltd, which is involved in a golf course and housing development near Queenstown. Woodlot was also associated with Loka Manyan Prawiro, the second son of Dr Radius Prawiro, former Finance Minister and Central Bank Governor under corrupt and brutal Indonesian President Suharto.
In the latest approval, which presumably tipped the OIC off about the lack of legal authority for the Henley deal, Pei-Ru Alice Lee as trustee for Fong Wei Heng of Singapore has approval to acquire 50% of High Country Lakes Limited for $1,425,000 from Ang Kong Hua of Singapore. The company owns 17.4 hectares in two blocks (0.3 hectares and 17.1 hectares) at Closeburn Station, Queenstown, Otago.
According to the OIC,
The subject property has an established residence on it and is part of a 27 lot rural residential subdivision development on Closeburn Station which was established to provide capital to enable the farming operation of Closeburn Station to be preserved, developed and operated as an economic unit. The acquisition will provide the Applicant’s family with a base in Central Otago from which to manage investments in New Zealand.
The proposal is in the national interest in terms of the Commission’s lifestyle property policy, in terms of the national interest test (sections 14D or 14E of the Overseas Investment Act 1973), as the Applicant (and family) has other significant investments in New Zealand. [Decision number 200510051.] Retrospective consent, change in Napier forestry and lifestyle developmentKirikiri Bay Joint Venture (formerly Radiata Bay Partnership), owned 45% by Stephen R Braswell of the U.S.A., 30% by G W Milner of the U.S.A., and 25% by Roger Dickie of Aotearoa, has retrospective approval to acquire 544 hectares at Tangoio, Napier, Hawkes Bay for $5,230,125 from Radiata Bay Limited owned 50% each by Stephen R Braswell and Ernestine D Braswell of the U.S.A.
The need for the retrospective approval appears to be due to an illegal change in the use of the land from what was approved in 2002, and a change in the structure of the investment. The developers found they could make more money from development and sale of the land than from forestry.
The OIC states:
In August 2002 approval was granted for Radiata Bay Partnership to acquire 543.6631 hectares of land situated at Tangoio Napier. The applications involved the development of approximately:
(a) 395 hectares from farming into a commercial forestry operation; and (b) 30 hectares into a lifestyle subdivision comprising 30 blocks.
The remaining 118 hectares which comprised scrub land or agricultural land would continue to be farmed pending long-term development plans for the construction of a tourist lodge on the property.
The Commission has now been advised that, while the original application discussed a partnership being formed, the structure of the proposed partnership between the investors has changed to be a joint venture known as the Kirikiri Bay Joint Venture.
The Commission has also been advised that the proposed development plans for the property have changed from that outlined at the time of the original application.
Kirikiri Bay Joint Venture now proposes to develop the property as follows:
(a) 192 hectares is to be developed as a commercial forest with a further 18 hectares being established as an Arboretum and Forest Museum; (b) up to 121 hectares is to be developed as a lifestyle Farm Park, comprising approximately 50 house sites, approximately 40 villa sites and approximately 75 hectares of amenity plantings of indigenous and native grasses, eucalyptus and poplar trees; (c) support facilities for the lifestyle Farm Park development are to be constructed, including a 9 hole golf course, a beach pavilion/restaurant, tennis courts and swimming pool on approximately 15 hectares of the property’s flat land in the vicinity that adjoins the foreshore; (d) approximately 7 hectares will be subdivided off, being the area of the property that currently adjoins the foreshore, and vested in a Local Authority or the Crown for the purposes of a Recreation or Scenic Reserve under the Reserves Act 1977; (e) 144 hectares will be utilised for the grazing of sheep and beef; (f) a 3 hectare amenity olive grove and vineyard will be established; and (g) three lifestyle blocks comprising 23.256 hectares in total will be subdivided and on-sold.
The amended development plans are a result of the participants in the joint venture realising that the property has additional development potential which exceeds that of establishing a commercial forestry operation on the majority of the property as was originally contemplated. It is claimed that the best economic benefit to be gained from the land is by establishing the lifestyle Farm Park development and associated support facilities. [Decision number 200510052.]
This was presumably discovered when the application for the following approval was lodged with the OIC.
Werner P Paulus of the U.S.A. has approval to acquire up to 62.5% of Kirikiri Bay Joint Venture (formerly Radiata Bay Partnership) which now owns 526 hectares at Tangoio, Napier, Hawkes Bay, for $2,365,923 from Stephen R Braswell and G W Milner of the U.S.A.
The OIC reports the situation above, adding:
Furthermore, it is proposed that there will be a change in the ownership from that originally proposed whereby Messrs Dickie and Paulus will acquire the interests of Messrs Braswell and Milner. This will result in Mr Paulus holding a 62.5% interest in Kirikiri Bay Joint Venture and interests associated with Mr Dickie holding the remaining 37.5% interest. [Decision number 200510053.] CDL buys Hamilton land for subdivisionCDL Land New Zealand Limited has approval to acquire 10 hectares at Sylvester Road, Hamilton, Waikato for $4,331,250 from Malcolm John Collingwood, Susanne Elizabeth Chartrand, Bruce Richard Collingwood, and Jennifer Lynne Bittle of Aotearoa.
According to the OIC,
The Applicant’s core business is the acquisition of land for residential subdivision and development. The proposed acquisition will further strengthen and grow the Applicant’s land bank and development portfolio. The subject property which adjoins land already owned by the Applicant, is currently grazed by a local farmer. It is not an economic unit and is situated within the boundaries of Hamilton City. It is proposed that the property, which is zoned residential, will be subdivided into 95 residential sections to be made available for sale to the open market. The subdivision development is likely to commence in 2006/07.
The OIC reports CDL Land New Zealand Ltd as being owned 22.0833% by the Hong Leong Group of Singapore, 20.133% by minority shareholders in Singapore, and 57.7837% by minority shareholders in Aotearoa, making it look majority owned in Aotearoa. However, CDL Land is a 100% subsidiary of CDL Investments New Zealand Ltd, itself a 61.12% subsidiary of CDL Hotels New Zealand Ltd. CDL Hotels New Zealand Ltd owns the largest hotel chain in Aotearoa and its 70.22% shareholder is Millennium and Copthorne Hotels Plc, a subsidiary of City Developments Ltd, part of the Singapore-based Hong Leong Group. It also owns the Kingsgate hotel chain through Kingsgate International Corporation Limited (CDL Hotels New Zealand Ltd Annual Report 2004).
CDL Land’s last purchase of land for subdivision was in September 2003, in Hastings. See our commentary for that month for further details. [Decision number 200510055.] Land for forestry· Fund 7 Foreign LLC, owned 56.89% by GMO Forestry Fund 7 International LP, 26.18% by GMO Forestry Fund 7-B LP, and 16.93% by GMO Forestry Fund 7-A LP, all of the U.S.A., has approval to acquire 434 hectares at Mititai Road, Waiotira, Northland for $5,222,000 from Waiotira Forests Limited of New Zealand. The OIC states: “The Applicant is an investment fund established and managed by Renewable Resources LLC for investment in timberlands outside of the United States of America. Renewable Resources LLC manages international forest investments including approximately 27,000 hectares in New Zealand comprising Crown forestry licences, forestry rights, leasehold and freehold land. The subject property contains 391.6 hectares planted in pinus radiata during 1981-1986, and 22.4 hectares planted in blackwoods. The remainder of the property consists of scrub and bush areas. The area planted in blackwoods will be subject to a forestry right in favour of the Spirit of Adventure Trust. Harvesting of the forest is likely to commence in the next three years.” GMO is a subsidiary of Grantham, Mayo, Van Otterloo and Co., LLC, a major forestry and property investor in Aotearoa. [Decision number 200510048.] · Chung Yi Jeng and Yih-Ying Kao as trustees of the Jeng Chung Yi Family Trust of Taiwan have approval to acquire 18 hectares at Unit 66, Brooklands, SH22, Ngaruawahia, Waikato for $127,440 from Hui Lin and Jie-Yang Lin and Jie Weng of China. According to the OIC, “The subject property is a unit of the Brooklands Forest which has been acquired and developed by way of sale of lots by the New Zealand Forestry Group (NZFG). The overall Brooklands Forest comprises approximately 1,165 hectares of planted land near Ngaruawahia that was planted in 2001. In effect the overall Brooklands development is a joint venture between overseas persons who provide development capital and NZFG who provide management expertise. The Applicant has entered into an Agreement for Sale and Purchase to acquire a lot in Brooklands Forest from the vendor. Following the acquisition the forestry lot will continue to be managed by a subsidiary of NZFG.” The last similar deal at Brooklands, in which New Zealand Forestry Group sells land in small blocks but continues to manage the forest that is planted on it, was in December 2004. New Zealand Forestry Group has similar operations at Paparangi, Wanganui, and elsewhere. The last approval outside Brooklands was in February 2005. See our commentary for those months for further details. [Decision number 200510056.] Land for wine· Benmorven Holdings Limited, a subsidiary of Lion Nathan Limited which is owned 46.13% by Kirin Brewery Company Limited of Japan, 46% by minority shareholders in Australia, 0.47% by “Persons who may be ‘overseas persons’”, and 7.4% by minority shareholders in Aotearoa, has approval to acquire 7.2 hectares at Ben Morven Road, Blenheim, Marlborough for $1,365,000 from Wither Hills Vineyards Marlborough Limited, also owned by Lion Nathan. The purchase is part of an agreement which involves eventually reselling it to Brent Marris, the founder and winemaker of Wither Hills. According to the OIC: “The Applicant is building an Australasian based premium wine company, as evidenced through the acquisition of the New Zealand based Wither Hills group, and the Australian wine businesses – Banksia and Petaluma. The Applicant proposes to acquire the subject property containing a residence and 6.3 hectares established in Sauvignon Blanc, from Wither Hills Vineyards Marlborough Limited, a wholly owned subsidiary of Lion Nathan Limited. The transaction forms part of a restructure of the existing joint venture structure and arrangements between Wither Hills, Lion Nathan Limited, and Brent Marris (the founder and winemaker of Wither Hills), whereby in consideration for Brent Marris’s ongoing involvement as winemaker it is intended that the property will ultimately be returned to Brent Marris’s ownership. The proposal is likely to continue the successful business association between Lion Nathan and Brent Marris and facilitate returning the property to New Zealand ownership.” [Decision number 200510049.] · Pear Tree Vineyard Limited, owned 45% by Matthew Alfred Farrah of Australia, 22.5% by Simon John Rees of Australia, 22.5% by Andrew Edward Ellis of Aotearoa and 10% by Anthony Louis Moore of Aotearoa, has approval to acquire 21 hectares at 78 Tyntesfield Road, Waihopai Valley, Marlborough for $1,125,000 from Graeme Warwick Sorensen and Joan Sorensen of Aotearoa. The OIC states: “The Applicant proposes to acquire the subject property which is currently a disused pear orchard and grazing land. The Applicant proposes to develop 18.4 plantable hectares of the land as a vineyard to produce Sauvignon Blanc wine for the Australian market.” [Decision number 200510057.] Other rural land sales· Agape-High Q-Holistic Horsemanship Corporation Limited, owned by Daniela Stockinger of Germany, has approval to acquire 122 hectares at Orere Point Road, Orere Point, Clevedon, Auckland for $12,937,500 from Stella D’Ora Limited owned by Ivan Hyman Louis Mindlin of Aotearoa. The OIC states: “The vendor has developed the subject property over the past seven years with the intention of operating a combined thoroughbred horse breeding facility and tree farm. The vendor has planted approximately 25,000 trees on the property, mainly chestnuts and black butt eucalyptus. The Applicant’s shareholder is an experienced Arabian horse breeder and trainer who wishes to continue her Arabian horse breeding and training programme in New Zealand, and continue her research in the area of Natural Horsemanship. The Applicant proposes to redevelop the existing buildings and facilities on the property, including the horse stud and equestrian riding school, and construct a conference centre (incorporating a house science centre, laboratory, library, seminar, reception and treatment rooms) and up to eight lodge vacation homes for the use of guests and patients. The Applicant’s shareholder proposes to reside on the property and is applying for New Zealand permanent residency under the Business Investor category. The Applicant’s shareholder is demonstrating a commitment to New Zealand through applying for and intending to take up New Zealand permanent residency.” [Decision number 200510054.] Summary statisticsAll investments This was a quiet month, with only eight approvals (plus two retrospectively), all involving land. As with last month, the value of investment approved in the year to April 2005 is considerably lower than for the previous April year, both net (i.e. disregarding sales from one overseas investor to another, and discounting part New Zealand ownership of the assets) and gross.
*In addition there were two retrospective approvals granted during the month. This involved a gross consideration of $6,380,125, a gross land area of 1250 hectares, a net disinvestment of $1,307,532, and a net land area of -136 hectares.
Investment involving land Gross sales of land approved by the OIC during the years to April have fallen drastically in area, though net sales are considerably up – from approximately negative 26,000 to positive 4,500. There have been no refusals (above) this year, compared to two at the same time last year.
*In addition there were two retrospective approvals granted during the month. This involved a gross consideration of $6,380,125, a gross land area of 1250 hectares, a net disinvestment of $1,307,532, and a net land area of -136 hectares.
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Compiled by: Campaign Against Foreign Control of Aotearoa, P. O. Box 2258 Christchurch. |
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