Wellington - German investors have bought 11 dairy farms covering more than 3,600 hectares in New Zealand's South Island, the Overseas Investment Office (OIO) reported on Tuesday.
The OIO said it had approved the sales of what is officially designated 'sensitive land' in December. It said DAH Beteiligungs GmbH, which bought five farms in Southland province, 'believes New Zealand is an ideal environment for investing in agriculture, particularly dairy farms.'
New Zealand is the world's biggest exporter of dairy products, with sales worth more than 10 billion New Zealand dollars (7.7 billion US dollars) last year.
The German interests paid about 110 million New Zealand dollars (85 million dollars) for the 11 farms they bought, with a German- Swiss syndicate paying 6.8 million New Zealand dollars (5.3 million dollars) for another 217 hectare property.
DAH Beteiligungs is a holding company owned by the family of Dietmar Hopp, who helped found the business software giant SAP in 1972. The applications were all in the name of his son Daniel, the company's managing director.
It paid 54.1 million New Zealand dollars (41.8 million dollars) for five farms covering more than 1,800 hectares.
Another German group, listed as Aquila AgrarInvest Investitions GmbH, D/S Neuseeland Milchfarm Investitions and Alceda Star SA, received approval to buy five farms covering 1,304 hectares for 37.6 million New Zealand dollars (29 million dollars).
The sales mark the first major drive into the New Zealand dairy industry by German investors, who had made only two previous farm purchases in the last five years.
Chinese interests are also bidding to enter the industry, with Pengxin International Group Limited, of Shanghai, announcing last week that it wanted to buy 16 New Zealand dairy farms in liquidation.
A bid for the farms by the Hong Kong-registered Natural Dairy (NZ) Holdings Ltd was rejected last month when the OIO said its directors had failed the required 'good character' test after one was declared bankrupt and the Serious Fraud Office launched an inquiry into the company.
Moves by foreigners to buy New Zealand farms are controversial.
Although Finance Minister Bill English has said foreign investment can make a positive contribution through increased jobs, capital and access to export markets, the government has acknowledged 'genuine public concern' over the issue and introduced moves to tighten the approval process which came into effect last month.
