Hawke’s Bay’s commercial property market was defined by a cautious but gradual recovery last year as low interest rates, continued inflows of insurance funds, and strong export earnings for primary industries proved valuable.
The region’s strong agricultural and horticultural performance gives confidence for future growth, and these underlying fundamentals are set to contribute towards a rebound for the region with general economic conditions gradually improving around the country.
The Colliers Research team recently published its Regional Essentials report for Hawke’s Bay and Hamish Fitchett, National Director of Research & Economics at Colliers, says the primary sector is a key cog in the economic performance of the province.
“Strong growth in demand for horticultural products, particularly Hawke’s Bay’s apple and pear industry, suggest that the primary sector will continue to be a major economic driver for the region in the years ahead,” Fitchett says.
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“This strength is driving up the value of prime orchards, attracting out-of-industry buyers, and further increasing demand for commercial properties linked to the industry.
“We are seeing this flow through to a boost in investor confidence and transaction volumes. The industrial sector continued to outperform and maintained strong demand, especially for facilities linked to the storage and logistics of agricultural products.”
Further research from Colliers notes demand for office and retail spaces slowed nationwide last year and Hawke’s Bay also experienced this.
The trend of flight-to-quality persisted in the office market locally with tenants showing a preference for well-located and high-quality buildings.
Danny Blair, Director at Colliers Hawke’s Bay, says the market yield for prime offices in Hawke’s Bay is ranging from 6 per cent to 7 per cent.
“This suggests that investors continued to see value for modern premises with quality amenities,” Blair says.
“Transaction-wise, the second half of 2025 was positive with more activity and some notable deals taking place.”
Some of the recent deals completed by Blair include sizeable industrial assets at 700 and 1120 Omahu Road for $7.2 million and $3.13 million respectively.
A multi-tenanted property at 12 Donnelly Street in Havelock North also recently sold via auction for $2.35 million at a 4.47 per cent yield.
Another bright spot is an increase in the rise in consents for new retail space in the year to September 2025, although there has been a drop off in new consents for the industrial sector, which is still absorbing high levels of new supply that have come on stream in recent years.
“The retail sector is always sensitive to economic conditions, but we are expecting a steady recovery as household balance sheets improve through lower interest rates, a robust housing market, and improving consumer confidence,” Blair says.
“Overall, the building blocks are in place for Hawke’s Bay’s commercial property market to continue its recovery trajectory following a challenging period caused by the tail end of the Covid-19 pandemic and extreme weather events.”
- Supplied by Colliers
