Sponsored by Hortinvest
Four cornerstone investors have underwritten the first trees for Hortinvest’s two multi-million dollar cherry orchard projects in Central Otago.
The first stage of planting is now under way at Lindis River and Mt Pisa, as horticultural investment company Hortinvest moves towards fully subscribing its $15.5 million, 80-hectare projects. Both have drawn widespread interest domestically and internationally – and they’re more than 40 per cent subscribed already.
Marketing and sales manager Sharon Kirk says negotiations are continuing with several large corporate investors over the remaining units. Other medium and smaller wholesale investors are on track to complete due diligence by 27 September.
Sharon and Ross Kirk, of Hortinvest
“The response has been fantastic and wide-ranging, with a mix of investors, including family trusts, expressing interest,” she says.
“The traditional beef and sheep landowners of Lindis Peaks Station and Mt Pisa Station, where the cherry projects will be developed, have invested for the long-term. They’re committed to seeing the projects come to fruition,” Kirk says.
“Buy-and-hold investments of this type can generate an excellent passive income,” Kirk says.
“Planting a cherry tree is long term, as it takes several years to come into production and several more to reach peak production.
“Managed properly, a tree will continue to produce for up to 40 years. In planting orchards, we’re investing in the future of the young people in this country.”
An investment hot spot
Kirk says the world is waking up to New Zealand as a horticulture investment hot spot.
“Multinationals, such as Germany’s BayWa, have invested in recent years and locally, large investors such as iwi, managed funds and corporate syndicates are turning to horticulture as a sustainable, high-returning investment for the long-term.”
The Central Otago region is recognised globally for producing New Zealand’s best cherries, and accounts for 90 per cent of supply.
However, the Southern Hemisphere is responsible for only five per cent of global production.
Kirk says this creates a large, untapped potential for growth in the cherry investment space.
China is the biggest and fastest-growing global market for New Zealand cherries, with some 400 million middle-class consumers seeking premium, healthy produce. But other markets are rapidly emerging in Asia and Europe.
Strong export prices and on-farm profitability offer an incentive for further investment and expansion, Kirk says.
The minimum investment in each Hortinvest project is NZ$100,000, spread over four years. At full production, financial year returns from 34 to 59 per cent are based on 12 and 18 tonnes per hectare.
Additional land is available for future projects, which might include blueberry and apricot developments.
Hortinvest offers a grower-packer-shipper model, so it can achieve maximum returns for investors.
Projects at a glance:
Value: NZ$15.5 million
Scale: 80 hectares
Water source: Clutha River
Production: first harvest 2021-22
IRR: 20.8-25% first 10 years
ROI: At peak mature production, 34-59%
Investment: NZ$100,000 over 4 years
Ross Kirk, Project and orchard manager, firstname.lastname@example.org
Sharon Kirk,Marketing and sales manager, email@example.com
To request an Information Memorandum visit the Hortinvest website on www.hortinvest.nz or email firstname.lastname@example.org
Located in Central Otago, New Zealand, Hortinvest Ltd is the leading consultant in New Zealand's emerging and highly profitable cherry and horticulture industry. Hortinvest employs world-leading orchard management and packhouse systems to produce and export premium New Zealand cherries.
Published 22 August 2019
This article does not contain any financial advice and has not taken into account any particular person’s circumstances. Before relying on it, we recommend you speak with a financial adviser. This story reflects the views of the contributor only. Content comes from sources that we consider are accurate, but we do not guarantee that the content is accurate.
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