New Zealand’s Retail Property Trends

Image courtesy of Kiwi Property Group

• Offshore interest picks up: Local investors remain the primary drivers of transaction activity, although offshore purchasing activity has increased. Investors are reweighting portfolios as a result of retail's improving fundamentals.
• Solid demand for key sectors: Non-discretionary retail, particularly large format retail and shopping centres, continues to outperform as households prioritise essentials, supporting defensive income.
• Buoyant economic fundamentals: New Zealand's population and GDP growth rates are projected to be strong through to 2035, providing a solid foundation for the retail sector.
• Structural undersupply: New Zealand ranks low by international standards for retail supply, with less than 0.6 sqm of retail space per person, indicating a market shortage.
• AI reshaping retail journey: As more shoppers use AI to compare products and prices, the case for physical stores increasingly rests on experience and immediacy rather than price.
  

New Zealand's projected average annual GDP growth of around 2.5% through to 2035, combined with population growth around 1.0% per year, supports retail spending growth. Auckland accounts for 39% of core retail spending, with Wellington at 14%, Christchurch at 9%, and the remainder of New Zealand at 38%.

The retail property sector is characterised by structural undersupply and clear performance divergence between categories. New Zealand's retail supply per capita sits at less than 0.6 sqm per person, ranking significantly below international comparables. The United States provides approximately 2.3 sqm per person, Canada 2.0 sqm, and Australia 1.1 sqm. Building consent issuance remains subdued at approximately 150,000 sqm annually, supporting demand for popular and well-located assets.

Shopping centres and large format retail demonstrate resilient demand with vacancy rates below 2.0%, while CBD strip retail faces elevated vacancy.

Consumer adoption of AI is changing how New Zealanders shop. A recent survey from NZ Post highlighted that 46% use AI to compare products, 34% to compare prices, 25% to summarise reviews and 25% to find the best retailer. Retailers are responding with 38% using AI for marketing and advertising, 38% for content generation, and 37% for analytics and insights.

The value proposition for physical stores relies on experience, immediacy and service. Retailers offering compelling in-store experiences, immediate product availability and seamless omnichannel integration maintain competitive advantages. 

Transaction activity has increased rapidly in 2026. Recent deals include the $308.36 million sale of a 49% share in Westfield Albany, the $146 million sale of Glenfield Mall in Auckland (7.18% yield), the $35.9 million acquisition of Woolworths Greenlane (5.40% yield), and the $11 million purchase of Mobil Mt Eden (6.21% yield). 

Download the full report: New Zealand Retail Property Trends

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

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