Prime Minister John Key says he is happy for a Chinese company to buy a central North Island farm so long as the correct process is followed.

A "one-off" slice of farmland nearly twice the size of the Crafar Farms could be heading to offshore buyers, reigniting the debate over foreign acquisition of valuable New Zealand land in the lead-up to the election.

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The potential sale of the Lochinver Station in the central North Island to Chinese company Shanghai Pengxin was described on Friday as a "tragedy" and "madness" by New Zealand First and Conservatives.


If given approval by the Overseas Investment Office (OIO) and Chinese authorities, it would be the second biggest sale of New Zealand farmland to a foreign owner in terms of value, and one of the biggest by area.

Pengxin, the owner of the 16 Crafar farms, confirmed yesterday its wholly-owned subsidiary Pure 100 Farms Limited had signed a sale and purchase agreement with the Stevenson Group, which has owned the 13,800ha station for 54 years.

Mr Key told Radio New Zealand today that the company had had success with the Crafar farms.

"As everyone will know, who knows the situation, those farms were run down and in a very poor condition and in the time that Shanghai Pengxin has owned them, They have been substantially improved and underpinned New Zealand's jobs."

Hundreds of thousands of New Zealand jobs were underpinned by foreign capital and it did not matter if that came from China, Germany, the United States or Australia, Mr Key said.

There was a process to follow and so long as a company could prove economic benefits, companies should be able to buy the land, he said.

"In my view a far better way of a long term relationship isn't buying huge tracks of New Zealand land - it's actually fundamentally around the development of jobs and processing and all of those kinds of things that add value in New Zealand."

The company's offer was not known, but the land was valued at just over $70 million. It could be used for sheep, beef and dairy farming.

Conservative Party leader Colin Craig revealed the deal at a public event because he felt foreign purchases of valuable land was an election issue that should not be kept secret.

"This is iconic, a one-off property. These things are rare in New Zealand. I think it would be a tragedy to lose it to foreign business interests and I think New Zealanders think the same."

New Zealand First leader Winston Peters said the sale was not in New Zealanders' long-term interests.

"[National] just don't care - they're letting anyone and everyone buy our houses, land and businesses."

The Crafar farms sold for $200 million in 2012 and the sale was the largest foreign purchase of New Zealand land by value.

Mr Craig's announcement that Conservatives would block foreign purchases of farmland or commercial blocks was a further bid for New Zealand First's centre-right voters. It was revealed at a Grey Power meeting, which is typically Mr Peter's home turf.

New Zealand First, along with Labour and Greens, have already announced plans to restrict substantial sales of land to overseas buyers.

Labour would also restrict sales of new properties to foreigners.