A Maori trust with financial backing from Dubai interests has scaled back the number of Southland farms it intends initially buying from 28 to 10, but the deal could face further delays, as it appears Overseas Investment Office approval is required.
The Invercargill real-estate agent handling the deal, John Wright, of LJ Hooker, said he expected to complete sale agreements on 10 farms today, for which he believed Overseas Investment Office (OIO) approval was not needed.
"The agreements are on my desk for analysis, which I expect to complete [today]," he said yesterday.
But OIO manager Annelies McClure said consent was required.
The rules stipulated if an overseas person or associate of an overseas person acquired an interest in sensitive New Zealand land, either freehold, lease or any other interest, then OIO approval was needed.
Mr Wright believed approval was not required because the hapu was effectively taking out a mortgage with the Dubai investors.
Ms McClure explained that the term "any other interest" included an interest in land that is secured by a mortgage.
"In addition, in purchasing the freehold interest in the land, the hapu is likely to be an associate of the Dubai funders," she said.
"Consent is required for both types of transaction under the Overseas Investment Act 2005."
Mr Wright said he was in the process of advising Maori Affairs Minister Pita Sharples and Agriculture Minister David Carter of the deal and the expected benefits, as well as getting guidance to ensure all requirements were met.
He said the unnamed hapu brokering the deal had "bitten off more than it could chew" and decided to prove its business model on a small number of farms before approaching the other 18 vendors with whom it had purchase contracts.
Mr Wright said the farm purchases were a business opportunity for Maori, who would be contracted to supply food to the Dubai funders for 99 years.
The hapu would own the land, with a mortgage funded from Dubai.
The present owners would be invited to continue farming the land for the new owners.
He could not say what area was involved but said the farms were a mix of dairy, sheep and beef.
Mr Wright said the hapu, which he described as "an informal gathering" of Maori from the North Island and Southland, had listened to concerns about the scale of the project.
Federated Farmers board member David Rose said he hoped, for the vendors' sake, the deals were completed, as they had twice been promised deposits by the hapu which never appeared.
