Christchurch Industrial Market Dynamics Q2 2026

• Christchurch's industrial market is strengthening, with vacancy rates declining as recently completed buildings are absorbed, even as a significant volume of new construction remains underway.
• The market has been in a prolonged period of stability, with both rental rates and investment yields holding steady, and little change expected in the near term.
• The outlook points to a gradual improvement in tenant activity, though occupiers are likely to remain cautious with expansion plans. This may result in longer negotiation periods.

The overall vacancy rate for Christchurch reached 5.4% in 1H26, reflecting a 50bps decrease from 2H25. This tightening indicates that the market is starting to absorb the recent influx of warehouse completions across major industrial hubs. Movement in vacancy rates across Christchurch’s key precincts was varied in 1H26, with the West recording 6.1% (down 70bps from 2H25), the East reaching 6.0% (down 70bps), the South rising to 5.1% (up 20bps), and Rolleston increasing to 4.3% (up 20bps). Christchurch’s industrial market continues to experience ongoing growth, with approximately 26,472sqm of new warehouse accommodation delivered across Hornby and Islington during the past six months. In addition, around 88,129sqm of industrial space remains under construction, including major developments such as 14 Gallagher Drive in Hornby and a neighbouring 6,000sqm yard facility.

The market is experiencing a prolonged phase of rental stability, with rents remaining unchanged across all grades. The last notable change was in the fourth quarter of 2024, when prime average net combined rents increased by 3.7% to NZD 169 per sqm p.a., and secondary rents climbed by 5.1% to NZD 124 per sqm p.a. Prime average net yields remained unchanged this quarter at 6.13%, while secondary average net yields held at 7.25%; both are expected to stay stable through the end of 2026.

Occupier activity is anticipated to track at moderate levels in the short term before strengthening progressively alongside improving economic sentiment and business conditions. Despite this, many tenants are still expected to adopt a measured approach to expansion decisions, potentially resulting in extended negotiation periods and floor space rationalisation in some sectors.