New Zealand’s Industrial Property Trends

• Investment activity remains robust: Industrial represents around half of all commercial property transactions annually, with stable yields and a diverse mix of local and offshore investors, owner-occupiers and developers supporting the sector.
• Prime rental growth continues: Rents are edging higher for prime warehouse space across New Zealand, driven by rent reversion as older leases move towards levels needed to support new development costs.
• Buoyant economic fundamentals: New Zealand's population and GDP growth rates are projected to increase through to 2035, underpinning sustained demand for logistics and distribution space. Occupier options increase - Vacancy rates have risen from cyclical lows recorded in 2022, providing more options for occupiers, though well-located, higher quality space continues to attract the strongest demand.
• Substantial development pipeline: Approximately 748,000 sqm is under development across the three main cities, representing significant investment in new warehouse space.
• Automation reshapes warehouses: AI-enabled logistics and automation will drive demand for larger, tech-ready warehouses over older, lower-spec stock.

New Zealand's industrial sector continues to demonstrate resilience as a preferred investment class. Throughout 2025 and into 2026, industrial and logistics assets have consistently represented around half of all commercial property transactions, supported by diverse capital sources including local institutional investors, offshore capital, private developers and owner-occupiers.

New Zealand's demographic and economic outlook provides a strong foundation for industrial demand. Between 2026 and 2035, average GDP growth is projected at around 2.5% annually, with population growth around 1.0% per year, positioning New Zealand favourably among developed markets. Industrial sectors account for approximately 25% of GDP, supporting over 250,000 jobs across Auckland, Wellington and Canterbury.

Vacancy rates have increased from the exceptionally tight 2022 levels, with Auckland at approximately 4% as of Q2 2026. However, approximately 70% of available space is secondary quality, with only 30% representing prime, modern facilities. This composition supports ongoing rental growth for quality assets, with prime combined warehouse and office space achieving approximately $230 per sqm per annum in Auckland, $190 per sqm in Wellington, and $180 per sqm in Christchurch.

Approximately 748,000 sqm is currently under development across the three main cities, with significant projects including Argosy Property's Mt Richmond Industrial Park (39,500 sqm), James Kirkpatrick Group's Puhinui Road development in Wiri (61,400 sqm), and Goodman's Waitomokia project in Mangere (41,500 sqm). Most projects target 2027 completion.

The sector is undergoing technological transformation that will reshape property requirements. Automation, AI and advanced logistics systems are becoming standard, demanding larger floor plates, higher clearance heights, greater power capacity and superior floor loading. Older facilities under 5,000 sqm with limited specifications will face increasing functional obsolescence, while well-located sites with redevelopment potential will become increasingly valuable.

Rents in the industrial sector have started to edge up after a period of consolidation. We are also witnessing an increase in the level of rents for warehouse space in Christchurch that is exceeding Wellington.

Yields have remained stable across major markets. Prime Auckland industrial assets are trading at 5.00% to 5.50%, Christchurch at 5.75% to 6.50%, and Wellington at 6.00% to 7.50%. Recent transactions underscore this appetite: 10 Te Ahurea Street in Hobsonville sold for $51.25 million at a 5.10% yield in Q2 2026, while 26-30 Aintree Avenue in Mangere transacted at $38.88 million on a 5.60% yield in Q3.

The sector's resilience across economic cycles, combined with its essential role in supporting trade and consumption, positions industrial property as a core holding for investors seeking stable, inflation-protected income.

Download the full report: New Zealand Industrial Property Trends

Want to know what's happening in New Zealand's other commercial property sectors?
 

• Read our New Zealand Office Property Trends
• Read our New Zealand Retail Property Trends