A quiet but powerful shift is underway in New Zealand’s commercial real estate market, with investors beginning to circle back as confidence returns and growth prospects strengthen.
According to JLL’s New Zealand Capital Markets Report 2025, the first half of the year has seen continued momentum in commercial and industrial property sales, building on the rebound that began in 2024. The report suggests 2023 marked the market’s lowest point, and a period of sustained recovery is now unfolding.
“The outlook for New Zealand's commercial and industrial property market remains constructive as we progress through 2025 and into 2026, supported by converging positive fundamentals that position the market for sustained growth,” the report stated, RNZ quoted.
Todd Lauchlan, Managing Director of JLL New Zealand, said investor sentiment had improved significantly thanks to easing inflation, lower interest rates, and supportive government policies.
“New Zealand looks like a good place to invest,” Lauchlan said. “People like to invest at the beginning of a new cycle, and we’re definitely at or near the bottom, starting to recover. So you see a lot of capital looking for opportunities,” as reported by RNZ.
While commercial property transaction levels are still below the 2021 peak of $7.08 billion, Lauchlan said the ongoing recovery indicates a healthy, sustainable foundation for future value and volume growth.
According to a report by RNZ, Auckland’s industrial vacancy rate currently sits at 2.8%, tighter than Sydney (4.4%), Melbourne (5.3%), and Brisbane (4.7%). The city also offers competitive yields, averaging 5.25%, compared to Sydney’s 5.44% and Melbourne’s 5.81%.
Auckland’s geography and limited land availability, combined with infrastructure developments like the City Rail Link (CRL) and upgraded bus networks, have further strengthened investor confidence.
“Replacement costs for new buildings are much higher than existing assets, which gives investors confidence that their value will continue to rise,” Lauchlan said, RNZ quoted.
Prime office spaces remain in high demand, while the secondary property market, older-grade buildings, is expected to see moderate rental growth as the economy stabilises.
The retail sector is also showing early signs of improvement, with shopping centres and large-format retail maintaining resilience amid evolving consumer patterns.
JLL’s report concludes that New Zealand now presents a strategic alternative to Australia for seasoned investors, thanks to its stable pricing environment and structural undersupply, particularly in the industrial sector.
Looking ahead, Lauchlan predicts the momentum will only strengthen.
“2026, I think, will be the best year in the last three or four — I’ve got no doubt about that,” he said confidently, quoted RNZ.