8 Apr 2026
We kicked off 2026 with an outlook that described it as the “year of momentum”. While the expectation was never that this momentum would be straightforward, we’d be remiss to say that this view hasn’t been impacted by the recent geopolitical situation and resulting energy shock.
In this blog, we look at the impacts of the Iran conflict on the New Zealand economy, commercial property and investor appetite over the next quarter.
While there is genuine uncertainty in the short to medium term, we are still cautiously optimistic about the year ahead and that there will be continued momentum, albeit more measured than initially expected.
Consumer spending, export performance, and business confidence will all be affected by how the Iran conflict plays out. However, the Reserve Bank of New Zealand has indicated that it expects the OCR to hold steady for at least the next few months.
At our Outlook 2026 events in February, panellists agreed that expectations can turn quickly, as evidenced by the past few weeks. They also reiterated the importance of focusing on real-time indicators such as trading conditions, leasing activity and household financial positions.
For PMG, this reinforces our active management approach, and focus on fundamentals and long-term performance, rather than chasing sentiment or reacting to external volatility.
In January this year, our CEO Scott McKenzie noted that New Zealand’s isolation, which we have historically viewed as a limitation, is increasingly an advantage. While no economy is immune from a shock of this scale, New Zealand's relative position is increasingly advantageous and, compared with larger, more exposed economies, we offer a stable and transparent environment for capital. More people are looking to New Zealand to live, invest and work - and that trend is accelerating.
The Government's Active Investor Plus visa programme had received over 500 applications representing $3 billion in potential investment as of February 2026, with over $1 billion already deployed.
The current environment reinforces the strategy we have been executing: building strength through scale, conservative borrowings, and leaning into sectors and assets that are less exposed to volatility and deliver consistent cashflow.
In this environment, interest rates are doing less of the heavy lifting. That means the performance of underlying assets matters more than ever - and it brings the investment case back to fundamentals.
At PMG, we maintain conservative borrowings and strong balance sheet discipline across our funds. We focus on operational efficiency across our portfolio (reducing energy use, waste and emissions), which directly lowers costs for tenants and protects returns for investors.
We are also highly selective on the sectors and assets we invest in. The gap between quality assets in enduring sectors and everything else will continue to widen. Our focus remains on large-format retail, warehousing and logistics, healthcare and childcare - sectors with structural, non-discretionary demand that is less influenced by where the daily oil price sits or how consumer confidence moves in the short term.
We are cautiously optimistic that the economic recovery will resume gradually. The fundamentals that made New Zealand commercial property an attractive destination for long-term capital at the start of this year have not changed.
Discipline and selectivity will define outcomes over the coming quarter. At PMG, that means continuing to build income resilience across our funds, staying active in how we manage our assets, and remaining close to our investors and tenants as conditions evolve.
Disclaimer: The information in this article is of a general nature and was current at April 2026. It is not intended to be regulated financial advice for the purpose of the Financial Markets Conduct Act 2013 and does not take your individual circumstances and financial situation into account. PMG does not provide financial advice. Please seek advice from a licensed financial advice provider before making any investment decisions.
