Value of foreign investments jumps 40 per cent

Saturday, 1 February 2020

The value of overseas investment in New Zealand land and businesses surged by 40 per cent to $17.5 billion last year, new data shows.

From January to December last year, the Overseas Investment Office approved 20,326 hectares of freehold land for sale to overseas buyers, almost double the 10,324ha approved over the same period in 2018.

In total, the office (OIO) approved land and business investments worth more than $17.5 billion in 2019, compared with $12.5b the year before.

The number of applications from potential overseas investors jumped from 97 to 145 in 2019, partly due to the OIO's functions being boosted by changes to the Overseas Investment Act in late 2018.

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OIO group manager Vanessa Horne said the role of the office was to protect New Zealand's sensitive land and assets while supporting high quality overseas investment.

'Overseas investment can bring many benefits, including access to global markets, the creation of jobs and introduction of new technologies,' Horne said.

'This needs to be carefully balanced with protecting our most sensitive land and major assets.'

The OIO approved 139 applications, including the sale of Trade Me Group Limited to British private equity firm Apax Partners for $2.6b and the $881.5m offer from Mexico's Finaccess Capital for a 75 per cent stake in Restaurant Brands.

Most applications to buy sensitive land were approved, however six applications for sensitive rural land were declined.

The Government is introducing new powers which it says will protect New Zealanders' interests in important assets such as ports and airports, telecommunications and electricity infrastructure.(First published in November 2019)

These applications were declined because the investment wasn't going to create a substantial and identifiable benefit.

The top three countries by net investment in 2019 were Canada ($1.18b), Singapore ($600m) and China ($527m).

The OIO also ramped up enforcement against overseas investors who didn't follow the rules.

The office took 45 enforcement actions, including requiring investors to sell assets, last year, up from 39 in 2018, Horne said.

Six investors were forced to sell assets and the office took civil proceedings or reached settlement agreements with five investors, issued five late filing penalties, and issued 29 formal warnings or compliance letters.

'It's a privilege for overseas people to invest in New Zealand,' Horne said.

'The OIO ensures investors get consent when they should, provide honest and complete information, and deliver on the commitments they make when they get OIO consent.'