German fund buying up NZ dairy farms

Detlef Schoen, CEO of Hamburg-based Aquila Capital Green Assets, part of Germany's Aquila Group, confirmed that his fund has assisted three separate investment funds and some individual investors to purchase shareholdings in New Zealand dairy farms.

“The New Zealand Overseas Investment Office has approved the purchase of shareholdings of 50 per cent or more in 14 New Zealand dairy farms, covering approximately 4000 hectares,”​ said Schoen.

According to Schoen, New Zealand offers the opportunity for investment in large, quality dairy farms that have the potential for increased production levels through further development.

“New Zealand has very efficient, grass-based dairy production systems and produces enough food each year for more than ten times its population. It has nearly 10 million hectares of productive grassland and agriculture generates almost 50 per cent of its annual export income,”​ he said.

Schoen added that their dairy farm investments, like all other farm investments, are benefitting from general hike in demand resulting from an increasing world population.

“But they are also a bet on increasing wealth in developing economies turbo-charging that demand increase, with China being the most obvious driver but others like Brazil, India and Russia also being important,”​ he said.

Highlighting other reasons why they choose New Zealand, Schoen pointed out that Kiwi farmers perform well even though they do not receive any form of government subsidy, which contrasts strongly, he added, with farming in developed European countries.

In those countries, farmers get high levels of inputs, heavy machinery, livestock housing and government support (subsidies) for crop inputs, storage and product exporting, said Schoen.

“It has been estimated that the energy requirements per unit of protein in New Zealand pastoral production are only half to one third of those in the UK and Europe,”​ he said.

According to Schoen, Aquila’s investors are private retail fund investors (rather than institutions) who invest between €10,000 and €20,000.

Aquila’s investments focus on dairy farms on pastoral land where animals are grass-fed rather than grain-fed, he said, adding that it is also advocating such investments in Romania, Canada, Uruguay and Chile.