MyFarm Investments, New Zealand's largest rural investment syndicator, has launched a $17.6 million investment fund offering investors exposure to increasingly sought-after Kiwi hops used in both local and international craft beer brewing.
The offer for the Tapawera Hop Garden Ltd Partnership includes the purchase of a 96-hectare property, near Nelson, and the lease of a second 50-hectare property which will be developed into a 116 canopy (effective) hectare garden, MyFarm said in a statement. According to MyFarm, it will be New Zealand's largest hop garden.
Half of the garden will be planted this spring alongside other developments such as building hop picking and drying facilities and worker accommodation. It is expected to reach full production in the financial year ending June 2022. The garden is projected to generate an average annual cash return of 15 percent per year by 2023.
The offer also includes a $3 million stake in hop exporter Hop Revolution, which will manage the garden and market the hops offshore. According to the latest research, global craft beer sales are projected to grow by a compound 19.9 percent annually and are forecast to reach US$500 billion by 2025. New Zealand spray-free aroma hops are sought after by craft brewers for the unique flavours they impart in beer, according to MyFarm.
MyFarm chief executive Andrew Watters said there has already been strong interest in the offer.
“We have had calls from investors asking when we are opening this offer because they don’t want to miss out. I think this is related to hops being quite a closed sector until now and people understanding the significant growth potential as a result of drinkers switching to craft beer," he said in a statement.
Applications for the Tapawera Hops Ltd Partnership offer for 1,764 parcels of $10,000 close on August 31. The minimum investment is $100,000.
MyFarm was set up in 1990, initially investing in dairy farms which it syndicated to investors. It has since diversified into sheep and beef farms, horticulture and mussel farming and has more than $500 million of rural assets under management.
New Zealand represents around 1 percent of the hop export market. According to grower co-operative New Zealand Hops, production reached 721,959 kilograms in the 2018 season, down 5 percent on the year, largely due to major weather events. The majority of New Zealand's hops are grown in the Nelson region.