The Property Council says the "anti-foreigner" tone of public debate about the possible sale of a group of Crafar family farms to Chinese interests is scaring off other foreign investors.
The Green Party and some farming sector leaders have called for the bid by the Hong Kong-based company Natural Dairy NZ Holdings to be rejected so that the farmland does not go into foreign hands.
Earlier this week, the state-owned farming enterprise, Landcorp, said it would also bid for the farms, although its offer is likely to be less than $200 million, and may not financially match Natural Dairy's offer.
Property Council chief executive Connal Townsend says the debate is quickly adopting an ignorant and anti-foreigner message, and that overseas investors are increasingly being put off New Zealand.
Mr Townsend says that the country urgently needs foreign capital investment to help it recover from the global financial crisis, and that the tone of the debate is making this task harder.
Natural Dairy plans $30m investment
Natural Dairy NZ Holdings says it plans to invest $30 million in developing the 16 Crafar farms - currently in recivership - if its bid succeeds. That will create 92 new jobs, it says, and generate $100 million in exports.
In a statement on the Scoop website, the company says it has re-submitted its application to the Overseas Investment Office. When it first applied, it was asked to provide more information.
As proof of its commitment to buying the farms, the company says, it has already negotiated a contract to produce and export 150 million packs of long-life milk, using milk supplied by Fonterra and a processing operation in New Zealand.
It also says it will offer sharemilkers the opportunity to tap into a special $1 million fund (rising to $5 million in the future) at discounted rates.
Spokesperson Bill Ralston says the company is confident its bid will be much higher than the counter-offer (endorsed by the Prime Minister) made on Monday by the state-owned enterprise Landcorp.
Alan Crafar prefers Natural Dairy bid
Owner Alan Crafar says he prefers a bid from Natural Dairy NZ Holdings, because his family would be better off if the bid is accepted.
Mr Crafar told Morning Report that Natural Dairy NZ Holdings would not evict him from his house.
"They've said we won't be thrown out of our houses, which is a good start," he said.
Mr Crafar says he still believes there is a possibility he can redeem his debts and retain ownership of the properties.
Bids for the farms close on Wednesday.