Canadian pension fund got clearance to buy dairy farm last month as Shanghai Pengxin turned down

Friday 30th October 2015

Canada's Public Sector Pension Investment Board, whose New Zealand assets including 30 percent of the nation's biggest plantation forest, got approval to add to its dairy farm portfolio in September, the same month that the government shot down Shanghai Pengxin's $88 million purchase of Lochinver Station.

Emerald Dairy Farm, which is indirectly owned by the Canadian pension fund known as PSP Investments, was granted consent to buy a 280 hectare dairy farm near Oxford in North Canterbury by the Overseas Investment Office. PSP met the test of a substantial and identifiable benefits to New Zealand with undertakings to create jobs, lift production, and boost export receipts. The OIO also took into account its previous investments in New Zealand.

PSP got approval last December to buy a 964 ha dairy farm near Mt Peel in Canterbury through a separate entity, Cumberland Dairy Farm, again meeting the test for jobs, production and exports. The price wasn't disclosed in either transaction.

In November last year, the OIO approved PSP's purchase of 18 commercial and retail properties for about $1 billion from AMP Capital Investors. That deal got over the line on job creation, development capital and the offer to gift a riverbed to the Crown.

PSP manages some C$112 billion in pension funds for Canada's public service, armed forces and mounties. Of its C$1.5 billion invested in natural resources, about 83 percent is in timberlands and 17 percent agriculture. Its increased investment in Kaingaroa and purchase of a portfolio of properties from AMP Capital Investors made Canada the biggest source of foreign investment in between January 2013 and December 2014, according to a KPMG survey of OIO data, putting China in second place.

Shanghai Pengxin is seeking a judicial review of the government's decision to decline its purchase of the 13,843 ha Lochinver Station, against advice from the OIO, on the basis the sale didn't provide enough benefit to New Zealand. It also withdrew from negotiations to buy 10 farms in Northland, citing five months of silence from the OIO.

BusinessDesk.co.nz

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