IKEA is now targeting NZ forests for investment, with the world’s largest furniture retailer buying out the country’s forests and farmland.
It comes as IKEA, through its sister company Ingka Group, has secured more than 20,000 hectares of commercial forestry and agricultural lands thanks to NZ’s controversial special forestry test – a process introduced in 2018 to streamline foreign investment into forestry.
In recent years, foreign interest in NZ forests “has blown all other asset classes off the map”, according to Beef and Lamb’s Chief Insight Officer, Julian Ashby, who said the (since removed) farm-to-forestry conversion provisions have driven a surge in foreign investment into commercial forestry.
As reported by NZ Herald this morning, data from the Overseas Investment Office shows Ingka Investments has been given approval for 25 sales in New Zealand covering 23,495 hectares, while one application is awaiting a decision.
When contacted about Ingka’s interest in buying up NZ agricultural and forestry, an IKEA spokesperson confirmed that the retailer was “considering different opportunities, including forestry investments into the country.
“We are committed to being in Aotearoa, New Zealand, for many years and are taking a long-term approach to our planning.
“Our goal is to protect and support forest resources for generations to come; we want to create long-term employment opportunities, support local biodiversity through the protected parts of our forests, and help to sequester GHGs [greenhouse gases] through the growth of our trees and the soil of the protected parts of our forests.”
The company has a small management team based in Tauranga that oversees all Ingka Investments properties, where it works with Forest 360, Logic Forest Solutions, IFS Growth, and Southern Forests.
“Our general approach is to invest in areas of resilience and sustainability that offer returns.”
Globally, Ingka Investments, IKEA’s largest owner-operator, holds a diverse portfolio, including stakes in a truck-sharing business, a logistics coordination firm, and various plastics recycling businesses.
In the past, it has secured more than 40,000 hectares of forests across Romania and the Baltics — after the company was accused of “brutal” logging practices in Russia and cutting “old forests that have high conservation value,” according to the Wall Street Journal.
IKEA is the world’s third-largest timber consumer by volume. In 2019, it procured more than 21 million cubic metres of timber for furniture products.
In January, Wood Central reported that work on IKEA’s new Auckland store—the first in New Zealand—is running to schedule and slated for an opening in mid-to-late 2025.
The building design meets Australian (rather than NZ) Standards and has successfully achieved a 5-Star Green Star rating for design. Once constructed, it should meet the eco requirements for NZ’s “Best Practice.”
“We’re six to seven months from groundbreaking, so we’re pleased about progress with the new store,” Mr Winterbine said in an interview with the NZ Herald.
IKEA’s push into the New Zealand market comes as the furniture giant pivots from Europe and instead focuses on the North American, Asian and Oceanic markets.
In October, Wood Central reported that the company is investing billions into improving the consumer “retail experience” in new and existing physical stores.
