Newspaper Article 2011 – Sale yardstick: $9.2m

Sale yardstick: $9.2m

Back-to-back deals confirm value of large farms in Bay

By Patrick O’Sullivan
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The sale of the historic 1001ha Gwavas Station for $9.2 million has set a benchmark for farm values in Hawke’s Bay.

Its sale at auction, with the $6.25 million sale of Willowford Dairies, has confirmed the value of large Bay farms. None had sold in the region in the past 18 months.

Gwavas, 5km north of Tikokino, had been owned by the Hudson family and direct descendants since 1856.

The sale included a large homestead dating back to the mid-1800s, two three-bedroom staff homes a five-stand woolshed, three sets of sheep yards and three additional sets of cattle yards.

Its 1001ha was capable of wintering about 13,500 stock. An adjacent 178ha was leased under a long-term agreement.

Bayleys Hawke’s Bay director Glyn Rees-Jones said of the two back-to back sales. “These were landmark sales for the district on a number of fronts.

“The new values set by these sales reflect the revaluation of farms from their production output levels, rather than relying on any capital gains, which many in the rural sector took for granted over the past four decades.”

Mr Rees-Jones said the strong presence of representatives from across the Hawke’s Bay rural economy at the auction reflected just how importantly farmers and their support services viewed the day’s proceedings.

“If these two farms had failed to sell, it would only have instilled further despondency on a market already doing it tough,” he said.

“However, with bidding on both farms – and ultimately sales – the auction process showed that Hawke’s Bay farm owners and the lending institutions behind them are now seriously listening to market feedback on land values.”

Property Brokers Hawke’s Bay’s farm sales manager Mark Johnson said the Gwavas sale price confirmed recent sale levels.

“Prices have held up pretty good on a low number of sales but they’re 20 about per cent down on 2007.”

The new owner of Gwavas is Te Awahohonu Forest Trust, which also owns Tarawera Station. Trustee and farm consultant Bob Cottrell said the trust was pleased with the purchase.

“We feel very privileged to get such a wonderful property,” he said.

“We were looking for a property that would complement our farming business and this was the one that came along.”

He declined to comment further, but Rural Delivery reported that the 2623ha Tarawera station, on the banks of the Mohaka River 60km from Napier on the road to Taupo, was part of 20,961ha owned by the Maori trust, including 5623ha of forest.

The trust had expressed a wish to purchase a property to fatten lambs.

Hundreds packed Napier’s War Memorial Hall for the Bayleys Hawke’s Bay auction on Friday.

Bidding for Gwavas opened at $4 million before it sold at $9.2 million. Its rateable value was $11.02 million.

Bidding for Willowford Dairies opened at $3 million before it sold for $6.25 million. It was bought by Hawke’s Bay father and son farming partners Doug and Peter Grieve.

Willowford had 400ha of effective productive land with a 320ha milking platform.

Its production average for the three years of its life as a dairy farm was 200,000kg of milk solids.

Fonterra shares were not included in the sale.

John Hudson, the seller, said he was glad the sale of Gwavas was over.

“I didn’t think it would happen on the day – it quite surprised me,” Mr Hudson said.

He had mixed emotions walking away from “a place like this” but was glad it sold to local people. “For all the noise about offshore interest in New Zealand and I did have one inquiry from overseas, it’s the local people who see the value.”

“These were landmark sales for the district.”
Glyn Rees-Jones, Bayleys HB

He pointed the finger at the Hawke’s Bay Regional Council’s decision to allow no more water consents for irrigation as the reason they had decided to sell.

“If they hadn’t changed the rules I wouldn’t be talking to you today.” He hoped the two proposed dams for the district would go ahead.

“The flow-on effect of irrigation to the community is tremendous. People say farmers are just looking after themselves when they make comments like that, but its true – you only need to look at places where they have irrigation schemes. It’s a no-brainer. It gives so much surety of income for the farmer.”

He said the family didn’t plan to leave the district.

“Our son is in boarding school in Hawke’s Bay and we’ve got to keep an eye on our daughter.”

Piera, 14, is a ski racer and alternates between Cadrona [Cardrona] and Switzerland.

He said his parents also remained on an original homestead beside the bush reserve, Puahanui.

Gwavas Garden Homestead was not part of the sale and remains operating as a separate facility on SH50 at Tikokino, operated by Mr Hudson’s sister.

Gwavas had originally been offered for sale on a shared-equity arrangement but the final sale was freehold, with settlement July 1.

The process had been a lesson. “When I started farming, selling wasn’t the intention, but it comes back to succession planning – you can never stand still.

“You can never do enough planning and have people who understand the business working with you.”

Photo caption – FAMILY SELLS: John and Fiona Hudson have sold the 155-year-old 1000ha Gwavas Station at auction.
PHOTO/SUPPLIED