Buyer still sought for Palliser Bay Station

By Martin Freeth

South Wairarapa’s Palliser Bay Station is still on the market after failing to sell at tender last November.

Bayleys agent Andrew Smith says a high-profile marketing campaign leading into the tender stimulated “phenomenal interest” in this highly notable property – 3,719 ha with extensive areas of flat pasture, hill country, river valley, forestry plantation and native vegetation, all set between Palliser Bay and Aorangi Forest Park.

Mr Smith told the Martinborough Star there has been enquiry from some 75 different groups based around New Zealand, across the Tasman and in the United Kingdom. “Interest has been generated by a significantly well spread marketing campaign, with a lot of intrigue about this unique landscape and opportunity. We haven’t got an outcome yet but I’m certain there will be, given more time.”

Palliser Bay Station has a rateable value of $9.5 million, reflecting its scale and unique seaside location — the property stretches along 7km of coastline – with an array of current and potential land uses and income streams.

It has well-developed sheep and beef breeding and finishing operations on 120 ha flat terraces and on a further 1,500 ha of grazable hill country largely covered in regenerating native vegetation. There are also well over 1,000 ha of mature native forest and shingle riverbeds opened by arrangement with the owners for hunting and honey production.

Today’s land uses on Palliser Bay Station include Emissions Trading Scheme registration on 455 ha of land classified as permanent native forest, deemed to have been established in stages since 2005. A further 22.9 ha planted in radiata pine are also ETS registered. Carbon capture in all these areas generates an allocation each year of more than 3,400 New Zealand Units (worth at least $215,000 on NZU prices in recent ETS trading).

Smith says the property has strong appeal to a diversity of potential buyers. 

“First, there’s huge emotional appeal around the property’s exceptional location and natural features, and thereafter you’ve got so many options to play out … farming, carbon credits, forestry, honey production, hunting, ecotourism, great coastal accommodation and more.”

The property has a rich history, including Māori settlement and food production and harvesting at coastal locations long before New Zealand was colonised. Settlement sites are protected today by local iwi and professional archaeologists.

According to Bayleys, a member of the Te Whaiti family, part of Ngāti Kahungunu ki Wairarapa, offered two parcels of land for sale in 1927, which were bought by young farmer Murdoch McLeod. He subsequently went into partnership with fellow farmer Bill McDougall and the pair expanded the property by acquiring a further parcel, still known as the Kawakawa block. It was farmed by two further generations of McLeods until being sold in several titles to Simon Crawford in the early 1990s.

Mr Crawford, Wairarapa-born and known for his international business career and other property interests, passed away in August 2022. He had enlarged and developed the property over the preceding 30 years.

Palliser Bay Station has also benefited from the professional farm management of Brian and Wayne Jepson over many years. 

Bayleys is marketing the property, held in five titles, on behalf of Simon Crawford’s surviving family. Andrew Smith says the sale process could yet see separate parts of Palliser Bay Station sold to different buyers.

“We would prefer a clean sale of the whole lot but if that’s where value is best recognised, we will look at selling in as many as five blocks to people who have strong interests in particular parts.”

He says buying interest has come from very diverse parties, including other Wairarapa farmers and local hunting groups, as well as Wellington-based individuals and corporate entities. There are also potential investors based in Australia and the UK.

Smith says the heady days of overseas acquisition of farm properties for large scale conversion to radiata pine are gone. “That’s just not a factor in this market.”

Such forestry conversions for carbon credits (and timber production) were a major driver of land sales and higher prices over the three years prior to August 2023, at which point the then Labour Government tightened the “special forestry” rules for overseas buying of New Zealand farms. Overseas Investment Office (OIO) approvals for foreign investment in farmland with intention to plant new pines shrank drastically in 2024. The OIO allowed only two such acquisitions in the Wairarapa region during the most recent 12 months: one in Tinui Valley with 331 ha earmarked for new forestry and another north of Masterton with 120 ha.

Other recently-released statistics show just how much of the South Wairarapa District has gone into radiata pine in recent years, with carbon credits clearly a major attraction for both local and international investors. 

At 1 April 2024, the district had 10,011 ha in pine plantation (only some of this was converted from pastoral land use). That plantation total was up 14% on the equivalent figure on 1 April 2019 (8,786 ha).

This South Wairarapa expansion rate was much faster than the overall New Zealand ramp-up in radiata pine forestry: the national total last April was 1.62 million ha, representing plantation area growth of 6% over the five years.

Clearly, Palliser Bay Station has various areas suitable for the planting of new pine blocks for carbon credits and/or timber production. 

This would be consistent with the Coalition Government’s December 2024 regulatory announcement to sharply limit forestry conversion of pastoral land that has the highest productivity classifications while also leaving farmers with mixed land use choices.

Caption: Palliser Bay Station’s main front paddocks (Photo courtesy Bayleys Real Estate).