Companies associated with Ingka Group, the largest franchisee of IKEA stores internationally, have bought more land in Southland.
December summaries were released by Toitu Te Whenua Land Information New Zealand this week.
It confirmed Ingka Investments Forest Assets NZ Ltd and Ingka Investments Management NZ Ltd were granted consent, under the sensitive land — special forestry (one-off purchase) pathway.
The purchasers have taken a freehold interest in about 359.803ha of land at Westwood Forest, 324 Waikana Rd, Taringatura in Southland.
The purchasers paid $11.3 million. It was sold by Westwood Timber Company Ltd and Westwood Timber Partnership.
In background provided by Toitu Te Whenua, the applicants were said to be two New Zealand incorporated companies who will acquire the land and hold a forestry right over the land, respectively. The companies are owned by Ingka Investments B.V., the investment arm of Ingka Group, which is the largest franchisee of IKEA stores internationally.
The land comprises existing forestry of about 293.1ha which is managed as a commercial rotational forest. Harvesting of the existing forestry is likely to be within the next three years and will be replanted. The remainder of the land will be unplanted to to native bush and infrastructure.
Consent was granted as the applicants met the investor test criterion and the special forestry test criteria.
Interests of Ingka have bought properties around the south in recent years, including the 5500ha Wisp Hill Station in Owaka Valley.
That has led to worries about productive land being converted to forestry to gain carbon credits.
In August 2022, the rules for overseas investments in forestry changed, making it harder for foreign investors to buy New Zealand farmland for conversion because they must now meet the stricter benefit to New Zealand test.
Foreign applications to convert farmland to permanent forestry — such as to earn carbon credits — must meet the farmland benefit test that required applicants to demonstrate the benefits were "significantly higher" than the current state.
There should be no issue with the latest purchase by the Ingka-backed group as it is buying a forest and maintaining its land use.
Netherlands-based Ingka Investments forestland investment manager Andriy Hrytsyuk told the Otago Daily Times the company was keen to stress they were not buying New Zealand land to sell carbon credits or offset its climate footprint.
He said the company was in the timber business and earned a return from selling wood.
Asked whether the company understood why buying prime farming land was controversial, he admitted they did not, to begin with. But the company was learning and it was not a straightforward issue.