Since I traded the Z3 on a Z4 3.0 in 2003, I'm not absolutely certain. But I just checked the manual for my "daily driver" '99 328i which has a virtually identical motor, and it states 91 AKI recommended with 87 as minimum. Since most stations sell 87, 89 or 93 in my area, I suspect I would have run my Z3 on 89 at least occaisionally if the manual had called for it. My 97 was an early model, one of the first with the 6 cylinder engine, so maybe the recommendation was changed mid year for yours.
BTW, the 2003 Z4 manual simply calls for 91 AKI minimum - I guess the implication is that lower octane will result in your hair falling out or some such!
True - at least we're both referring to the same octane! It might be interesting if you could test fuel mileage under similar conditions with both 89 and 91 (or 92-93) octane to see if the improvement is worth the additional $$.
Enjoy your Z.
Tom