As 2025 comes to a close, New Zealand’s commercial property market is showing cautious optimism. While some sectors are still facing headwinds, industrial and logistics assets continue to outperform, transaction volumes are rising, and investor confidence is gradually returning. Here’s what property owners, landlords, and investors need to know as we head into 2026.
This market update draws on publicly available research and insights from Colliers International New Zealand, CBRE New Zealand, JLL, and RNZ, combined with our own analysis and on-the-ground market experience.
Industrial & Logistics: The Clear Winner
Industrial and logistics properties remain the standout performers in the NZ market. According to CBRE New Zealand, Auckland’s industrial vacancy sits at just 1.6%, while Christchurch is at 1.7%. Colliers reports overall Auckland industrial vacancy at 2.2%, with prime-quality space even tighter at 1.1% — a clear signal that tenants are seeking modern, well-located facilities.
Industrial assets accounted for 59% of total commercial sales value nationwide in 2024 (Colliers NZ), reflecting sustained interest from both domestic and international investors.
CBRE projects industrial rents to grow 3–4% annually through 2026–2027, supported by e-commerce growth, supply chain restructuring, and the increasing demand for warehousing and distribution facilities. For property owners, industrial assets continue to offer strong liquidity and long-term appeal.
Offices & CBD Commercial: Stabilisation but Mixed Outcomes
The office market is showing early signs of stabilisation, but performance is increasingly split by building quality. CBRE research indicates that 29% of occupiers plan to reduce office space, while 39% are seeking to relocate into higher-quality buildings.
Auckland CBD office vacancy increased slightly to 14.6%, driven by secondary-grade stock, while prime-grade vacancy tightened to 8.4%. New developments, including projects like 50 Albert Street, are expected to bring an additional 28,500 sqm of office space to the market, continuing to influence conditions into 2026. (Colliers NZ)
For office landlords and investors, asset quality, location, and ongoing investment are becoming increasingly important to maintain occupancy and rental performance.
Retail & Other Sectors: Cautious Optimism
Retail property is beginning to stabilise following a period disruption. CBRE reports investor interest in retail assets increased to 9% in 2025, up from 4% in 2023. Strong-format retail, including supermarkets and large-format stores, continues to show resilience, while smaller or poorly located retail assets remain under pressure.
For property owners, well-located and modern retail properties may offer stable income streams, but careful tenant management and asset selection remain critical.
Investment Activity & Market Sentiment
Commercial and industrial property sales over NZ$5 million reached NZ$3.7 billion in 2024, up about NZ$131 million from 2023. Transaction volumes rose 16% year-on-year, indicating a gradual improvement in investor sentiment. International investors accounted for roughly 18% of all transactions over $5 million, reinforcing New Zealand’s ongoing appeal to offshore capital. (RNZ)
With yields stabilising and interest rates easing, capital is becoming more readily available. Investors are increasingly focused on industrial assets, prime office buildings, and selective retail opportunities for long-term value and income.
Key Trends & Risks to Watch in 2026
- Supply pipeline: New office and industrial developments may place pressure on secondary-grade assets.
- Flight-to-quality: Tenant demand continues to favour modern, well-located buildings.
- Economic factors: Interest rates, inflation, and business confidence will influence demand and rental growth.
- Sector divergence: Industrial remains the strongest performer, offices are stabilising selectively, and retail outcomes remain mixed.
What This Means for Property Owners
- Industrial assets continue to offer strong fundamentals for income and long-term growth.
- Office landlords may need to reposition or upgrade assets to remain competitive.
- Retail investors should focus on strong-format, well-located properties.
- Older or secondary assets may require strategic repositioning or divestment.
- Market conditions may present opportunities for acquisitions or capital improvements ahead of a broader recovery.
This information is provided for general market commentary purposes only and does not constitute financial, legal, or investment advice. Readers should seek independent professional advice before making any property or investment decisions.
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