Foreign Direct Investment in NZ – trends and insights

Foreign Direct Investment in New Zealand – trends and insights

Monday 17th August 2015

With much of the media and the public’s attention focused on foreign investment in residential housing, KPMG has prepared an analysis of Foreign Direct Investment (FDI) into the productive assets of our country, businesses and agriculture.

FDI is an area which frequently tests the comfort zone of a country. Fears of a loss of sovereignty, dealing with different cultures, uncertainty as to the actual benefits of investment and the implications for future generations are frequent discussion points in the media and the wider public. KPMG has analysed FDI information provided by the Overseas Investment Office (OIO) based on decisions over the 2013 -2014 period, to bring clarity to what’s actually happening with Foreign Direct Investment into New Zealand. This captures the larger investments into our country by overseas investors.

The analysis finds that;
· Approximately 59% of FDI continues to come from North America, Australia and Europe. Asia accounted for 33% of total investment.

· China’s share of investment has not increased substantially from our previous analysis in 2013. Where investments have occurred they have focused primarily on dairy and real estate development.

· Canada was New Zealand’s most significant source of FDI accounting for 22% based on gross consideration data. China accounted for 14%, USA 13% and Australia 11%.

· The United States is the largest acquirer of land for the 2013-2014 period, followed by China and the Netherlands.

· The largest 20 transactions for 2013 and 2014 account for approx. 64% of the total reported overseas investment.

FDI can be an important contributor to the nation’s prosperity. Particularly where it results in investment into new productive assets and the development of export focused business ventures. Strong trade relationships and the creation of employment opportunities for the next generation underpin a healthy economy.

The attached KPMG analysis breaks down FDI into the origin of investment, investment from Asia, the top 10 investments by year, and the destination by sectors of FDI.

Land acquisition is broken down into the country of origin, and what the acquired land is used for.

The full embargoed FDI analysis is attached.

http://img.scoop.co.nz/media/pdfs/1508/KPMG_analysis_OIO_Statistics__August_2015.pdf

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