Shanghai Pengxin buys second large farm

06:50, Aug 01 2014
Lochinver station
PRIME PLOT: Lochinver Station, near Taupo, is one of New Zealand's largest and most valuable stations.

The second-biggest foreign acquisition of New Zealand land is underway.

Pengxin, the Chinese company that bought the Crafar farms, has signed up to buy Lochinver Station near Taupo.

The 16 Crafar farms, covering about 8000 hectares in the central North Island, were controversially bought by the Pengxin New Zealand Farm Group in December 2012 and are run by Landcorp. The Crafar farms sold for $200 million and are the largest foreign acquisition of New Zealand land by value.

The 13,800-hectare Lochinver Station, valued at more than $70m, was put up for tender in December last year by the privately owned Stevenson Group, which has owned the property for more than 50 years.

Mark Franklin, chief executive for Stevenson Group, confirmed this afternoon a conditional deal had been struck to sell the property to Shanghai Pengxin.

"We've got a conditional sale - one of those conditions is Overseas Investment Office (OIO) approval," he said.

Franklin said normally these deals were confidential, but Conservative Party leader Colin Craig's speech to Hastings Grey Power this morning meant he needed to give context to the proposed deal.

Craig had said investigators acting for his party had learned of the sale, but the deal was being kept secret so that it would not become an election issue.

Franklin said capital freed up by the farm sale would allow Stevenson Group - which had decided farming was no longer part of its core business - to fast-track its major Drury South development, which would employ up to 8000 people," Franklin said.

"This'll allow us to employ a lot more New Zealand people than the farm, that's for sure," he said.

Franklin supported Shanghai Pengxin's vision for Lochinver.

"We've brought Lochinver up to a big stage - and their view is to take it further as part of their vision for a New Zealand supply chain. We support that process, it's a good thing," he said.

Shanghai Pengxin is expected to make a statement on the deal shortly.

Craig said the "iconic" station was a "major slice of our country".

"And they've sold it to the Chinese. We need to stop that.

"It's not right to be selling our country from under our future generations.

"If we have the 'For Sale' sign up, they will buy us. We will be tenants in our own land."

The OIO confirmed this afternoon it had received an application for the purchase of Lochinver Station, but all details remained secret.

"All details relating to the application, including the identity of the purchaser, are withheld under the Official Information Act as the release of the information, at least prior to a decision being made, would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information," OIO manager Annelies McClure said.

Craig said the Conservative Party would oppose all substantial land sales to foreign business interests.

"We will be changing the criteria of the Overseas Investment Office so that our country is not sold up. It's time to take down the 'For Sale' sign on New Zealand."

Craig played down claims he was scaremongering.

"This is not scaremongering this is raising what is an issue that matters to New Zealanders. Kiwis will care about this. They will not be excited about the fact that there is another big sale to offshore business interests."

The National Party had "waved through the Crafar farms deal against our national interests and doubtless will do the same with Lochinver Station", Craig said.

"A vote for National this election is a vote to continue selling up our country to foreign business interests. We are standing up for Kiwis who want this country to remain New Zealand-owned." Though he said he supported "alternative approaches" such as joint ventures and leasing options, "we can do business without selling our soul".

Craig also fired a shot at Prime Minister John Key for his statements that New Zealanders shouldn't be concerned about Chinese land acquisitions.

Craig also claimed Key had suggested New Zealanders buy land in China.

Key has previously defended rural property sales, claiming that less than 1 per cent of all farmland has been sold to foreign investors.

"The PM needs to realise that New Zealanders can't buy land in China because the Chinese aren't naive enough to sell it," Craig said.

"It's time to get commercially smart; land is a truly scarce resource, and the future prosperity and wellbeing of New Zealanders should not be for sale." NZ First leader Winston Peters has also campaigned strongly against Chinese land purchases.

Labour has promised to tighten up the foreign investment regime.