Commercial property in New Zealand continues to experience a steady recovery as sales activity trends upwards.
According to the latest research from Colliers based upon data sourced from CoreLogic, both the number of transactions and total sales value recorded in 2024 exceeded 2023 figures.
The total value of commercial and industrial property sales over $5 million reached $3.699 billion in 2024, an increase of approximately $131 million on the 2023 total and $142 million above the cyclical low recorded in 2022.
While still below the 10-year average of $4.653 billion, improving economic conditions point towards further continuation of the current recovery cycle.
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Transaction numbers also trended upward, with the annual sales volume rising by 16 per cent compared to 2023.
Ian Little, National Director of Research at Colliers, says while sales activity still trails decade-long averages, key indicators show promising signs for commercial property.
"The latest data release from MSCI shows capital returns for the All Property index in the 12 months to March 2025 returned to positive territory for the first time since June 2022, Little says.
"Correspondingly, the total annual return for the same period reached 7.2 per cent, up from the 1.3 per cent recorded a year earlier.
"This points towards stabilisation in the commercial and industrial property investment market where falling interest rates contributed to stabilising property values and yields."
Falling interest rates have also led to declining returns on fixed-term deposits, prompting a rise in market liquidity as investors seek higher-yielding alternatives.
The industrial sector generated the highest levels of liquidity in 2024, while sales of industrial assets valued over $5 million increased by 21 per cent from the 2023 figure, totalling just under $2.2 billion.
Industrial property sales accounted for 59 per cent of the national total in 2024, the highest annual proportion recorded to date.
Retail property sales exceeded 2023 levels to reach just under $800 million as investors continued to target safe haven assets such as supermarkets and large format retail premises.
"Early indicators suggest the recovery in sales activity is continuing in 2025 as more favourable trading conditions emerge," Little says.
"Investor confidence is gradually returning and we have already seen a series of notable transactions within the industrial, supermarket, and large format retail sectors so far this year."
One standout transaction so far in 2025 was the unconditional sale of a 90,000sq m industrial site at 38-44 Dalgety Drive in the South Auckland suburb of Wiri for $120 million.
The deal was brokered by Greg Goldfinch, National Director of Industrial at Colliers, and the property was sold to ESR Australia and New Zealand who plan to redevelop the site over the next three years.
Richard Kirke, International Sales Director of Capital Markets at Colliers, says New Zealand is experiencing renewed interest from international investors.
"Offshore capital has returned in a material way to the New Zealand market given our improving investment fundamentals and redevelopment returns," Kirke says.
"The recent sale of 38-44 Dalgety Drive points towards increased confidence from overseas buyers who are willing to act when the right opportunity arises."
- Supplied by Colliers
