Industrial property remains one of the strongest-performing segments of the Manawatū-Whanganui commercial market, supported by the region’s role as a major North Island freight and distribution hub.
The area’s central location within the lower North Island means it offers convenient connections to the Golden Triangle of Hamilton, Tauranga and Auckland to the north, and Wellington to the south.
Occupier demand continues to be underpinned by logistics, wholesale trade, food-related industries, and firms linked to defence and manufacturing activity.
This is reinforced by the scale of the regional distribution and logistics sector, which contributed approximately $898 million to the economy in 2024 and accounted for 12.2 per cent of regional GDP.
Start your property search
Colliers recently published its Manawatū-Whanganui Regional Essentials report, which notes the region offers a stable, diversified economy with resilient performance across sectors and an affordable property market relative to national averages.
The industrial sector continues to be a main driver within the commercial property market, and Colliers Palmerston North transacted more than 50 per cent of the deals completed within the region across 2025.
Phil Nevill, Director at Colliers Palmerston North, says while transactional evidence indicates a stable market environment, purchasers continue to conduct rigorous due diligence and demonstrate a clear preference for assets that offer secure income and limited leasing risk.
“Strong investment continues to be directed towards modern properties with sound tenant profiles, strong lease tenure, and compliance with current building standards,” Nevill says.
“The market appears to remain buoyant in the sub-$10 million range, with significant investment sales completed across the year.
"The pricing achieved reflects investment returns in the mid-5 per cent to 6.5 per cent range, providing further evidence that investor appetite for quality regional assets remains intact despite broader economic uncertainty.”
Some examples of these deals include Palmerston North properties at 8 The Cutting Way ($4.1 million), 5 Milson Line ($3.2 million), and 20 Bennett Street ($6.15 million).
Looking at other areas of the market, Angus Findlay, Commercial & Industrial Sales Broker at Colliers Palmerston North, says retail demand is dispersed across the region’s local hubs.
“The market has evolved into a two-speed market, with activities shifting away from discretionary retail towards essential consumer services as high living costs bite.
"Demand has remained robust for essentials and large format retail properties,” Findlay says.
“Retail rents across the region vary by location, showing a pricing gap between prime city centre and outer provincial townships.
"In Palmerston North, prime retail net face rent sits at approximately $450 per square metre.”
Office demand within Palmerston North is highly selective and follows the national trend favouring quality prime offices over more affordable secondary grade alternatives.
Corporate and institutional tenants, government entities, and professional services firms have been reducing their space requirements and prioritising space efficiency, according to the research from Colliers.
Demand is concentrated on well-built assets featuring modern, energy-efficient fit-outs and ample on-site parking.
Eunice Tsang, Senior Research Analyst at Colliers, says Manawatū-Whanganui’s longer-term outlook is supported by steady population growth and relative housing affordability.
“Stats NZ’s medium population projections indicate the region’s population will increase from 257,800 in 2023 to 265,600 by 2028, 271,200 by 2033, and 289,800 by 2053, representing growth of 32,100 people, or 12.5 per cent, over the 30-year period,” Tsang says.
“While this is a more moderate pace than some faster-growing upper North Island regions, it provides stable growth in demand for housing, infrastructure, services, and commercial space over time.
“The region’s affordability and proximity to Wellington is helping underpin household growth and population retention while reinforcing longer-term demand for commercial property.”
- Supplied by Colliers
