Landmark farm sales set new precedent for rural land values

Two multi-million dollar Hawke’s Bay farms which sold under the auctioneer’s hammer within an hour of each other have redefined rural land values for the region.

First to go under the hammer was a 530 hectare high-tech’ dairy conversion known as Willowford Dairies which sold for $6.25milion. Then the 1001 hectare Gwavas Station - which has been continually owned by the same family for some 155 years – sold for $9.2million. The consecutive sales were conducted by Bayleys Real Estate.

Some 250 people packed Napier’s War Memorial Hall for the auctions last week. Among the crowd were farmers from throughout the North Island, as well as scores of lawyers, land valuers and real estate salespeople from competing property agencies in the Hawke’s Bay region.

Bayleys Hawke’s Bay director Glyn Rees-Jones says the two back-to-back sales set a new standard for rural price values in the district.

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

The property has 400 hectares of effective productive land – with a 320 hectare milking platform, of which 240 hectares is able to be irrigated.

The farm – with a three year production average of 200,000 kilogrammes of milk solids - was sold without Fonterra shares, which, when factored in, meant the property sold for well in excess of $30 a kilogram of milk solids.
Bidding for Gwavas opened at $4million before finally selling at $9.2million. The property was bought by a private trust with farming experience and an existing presence in Hawke’s Bay.

“These were landmark sales for the district on a number of fronts,” Mr Rees-Jones said.
“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 Hawke’s Bay rural economy at the auction, reflected just how importantly farmers and their support services viewed the day’s proceedings.