Commercial investors find reasons to move

Infrastructure investment, recovering tourism and business succession are creating openings across New Zealand’s commercial property market, with buyers pursuing opportunities that stand up to scrutiny in an uneven economy.

Industry leaders assess the commercial market

In Bayleys’ latest Total Property portfolio, eight industry leaders examine the transactions and changing priorities that shaped the commercial landscape in 2026. Their insights reveal where confidence is translating into commitment, and what investors, developers, businesses and asset owners are weighing as they prepare for 2027.

Commercial transaction activity builds on 2025

Following a record 2025 for commercial transaction volumes, Bayleys is tracking 10-percent ahead of the corresponding period, year to date. Offshore enquiries, particularly from Australia and Singapore, have contributed, with the exchange rate influencing buyers’ assessments of New Zealand assets.

Export strength supported regional economies, returning visitors renewed activity in tourism centres, and businesses revisited investment decisions after several demanding years. However, borrowing costs, global disruption and election uncertainty influenced the pace of commitment.

Bayleys national director commercial and capital markets Ryan Johnson says the activity reflects a broad range of commercial motivations.

“Succession brought businesses to market, investors examined the durability of income, occupiers sought premises that worked hard for their businesses, and developers concentrated on sites with a credible route to delivery. Together, these shifts sharpened demand for advice connecting property decisions with wider commercial objectives.”

Buyers prioritise durable businesses and income

For business buyers, the quality of an operation mattered as much as its location. Reliable financial records, established customers and businesses capable of transferring beyond their owners gave purchasers greater confidence that earnings could endure.

Industrial buyers remain active but selective

Similar scrutiny extended to commercial buildings, where location, functionality and secure income remained central to investment decisions.

Bayleys national industrial director Scott Campbell says activity improved, although buyers remained selective.

“Demand centred around assets where buyers could establish a sound investment case. Industrial land prices remained relatively stable despite ongoing economic and geopolitical uncertainty, while lending costs continued to slow some decision-making processes.

Yields also remained broadly stable, and relatively steady rents and construction costs gave developers a more consistent basis for assessing projects.”

Lease packages and functionality influence occupiers

For occupiers, greater availability and new supply expanded choice, prompting landlords to compete through the overall lease package.

“Incentives, fit-out arrangements, lease length and building functionality influenced the overall proposition more than ever. Premises that supported efficient operations could offer value beyond a concession on rent.”

Office market conditions vary by location

Across the wider leasing market, conditions depended heavily on location and building quality. Auckland’s shortage of A-grade offices redirected some enquiries toward B-grade premises in the CBD, midtown, and established city-fringe locations. Suitable single-occupier options above 1,000sqm became harder to find, increasing the importance of early planning.

Improved transport connections strengthened the appeal of refurbished premises, supporting investment in amenities and turnkey suites. Christchurch recorded buoyant relocation activity, while downsizing and surplus sublease space continued to pressure Wellington rents. For owners, these differences sharpened decisions about where upgrades could attract tenants and improve performance.

Infrastructure determines development viability

Infrastructure has been equally consequential for development land, where service availability determined whether planning potential could become a viable project.

Bayleys national director customer engagement and advisory Paula Bennett, says understanding the practical consequences of policy and reform became an important part of client conversations.

“Clients needed to understand how reforms affected their assets, what steps they might need to take and the likely timeframes. Explaining those distinctions helped them assess their options and set realistic expectations.”

Policy reform shapes property decisions

Resource management reform, Fast-track processes, and earthquake-prone building settings, in particular, could influence future use, holding costs, and development pathways.

The development market illustrated those stakes. Transactions concentrated in plan-enabled locations where infrastructure supported delivery, with servicing constraints sometimes prompting developers to look beyond their traditional operating areas.

Bennett also saw overseas buyers increasingly consider New Zealand, particularly for assets above $20 million.

“While domestic conversations often concentrated on the difficulties, international buyers were also seeing reasons to invest here. That level of interest and the value of potential capital is enormously positive for New Zealand.”

Tourism recovery supports investment activity

Tourism offered another connection between investment and wider economic activity, supporting accommodation, hospitality and businesses serving returning visitors.

Bayleys national director hotels, tourism and leisure Wayne Keene says 2026 delivered stronger evidence behind the sector’s recovery.

International arrivals in June rose five percent year-on-year to 94 percent of June 2019 levels. South Island airports welcomed 1.05 million overseas arrivals in the year to June 2026, compared with 881,300 a year earlier.

“Improvement is visible in both visitor activity and investment conversations,” he says. “Buyers have more operating evidence to consider and more confidence in the sources of future demand.”

Hotel sales reflect varied investment strategies

Transactions demonstrated the sector’s range. An international hotel group acquired units within Auckland’s Barclay Suites for $7.85 million with repositioning plans. Taupō’s Beechtree Motel sold as a freehold going concern for $9 million, while Marlborough Riverside Hotel sold as a freehold investment for $7.21 million at a 6.66 percent yield.

“Those sales involved different objectives: improving an asset, operating a business and acquiring leased income. The sector supported each of those approaches.”

Property decisions begin with business outcomes

Across these markets, property decisions increasingly began with the outcome a business or owner needed to achieve.

Bayleys national director strategic business development Davina Henderson says operational performance, financial outcomes, staff needs and risk carried greater weight, alongside certainty and flexibility.

“An instruction to lease, acquire or sell frequently led to a wider discussion about the client’s business. Understanding that context brought other requirements into view and, in many cases, expanded engagement across several specialist teams.”

Johnson agrees, noting that effective leaders concentrated on planning, operations and readiness to adapt. That approach helped turn broad uncertainty into specific decisions about assets, timing and capital.

“The same discipline provides perspective beyond policy debate. Committed infrastructure, occupier behaviour and local performance give purchasers something concrete to assess. Those fundamentals will continue to shape the commercial landscape as the policy outlook takes shape and into 2027,” he says.