Market Update: October

As we move through the final quarter of the year, there are growing signs of confidence returning to New Zealand's commercial property market.

While economic uncertainty hasn't disappeared entirely, we're seeing more activity, more conversations turning into opportunities, and growing evidence that investors are looking beyond short-term market conditions and focusing on long-term value.

Transaction activity is increasing, lending conditions are improving, and offshore investors are once again recognising the opportunities available in New Zealand. At the same time, businesses continue to navigate higher operating costs and an evolving economic environment.

For investors, it's a timely reminder that property is a long-term asset class. Market cycles come and go, but strong assets, quality tenants and active management remain the foundations of sustainable performance.

A market finding its footing

Over the past 12 months, uncertainty has made many investors cautious. Today, we're seeing signs that confidence is gradually returning.
Recent market activity suggests investors are becoming more willing to act as pricing stabilises and opportunities become clearer. More transactions are helping establish value benchmarks across the market, while increasing leasing activity reflects continuing demand from businesses seeking well-located, fit-for-purpose space.

These aren't signs of a market racing ahead, but they are signs of a market moving forward.

"We're seeing more activity across the market than we were earlier in the year. Investor engagement is improving and deal pipelines are strengthening. While sentiment remains mixed, there are encouraging signs that confidence is gradually returning. Our focus remains on the fundamentals, staying close to tenants and actively managing assets to support long-term performance," says PMG CEO Scott McKenzie.

Looking beyond the headlines

Economic headlines continue to focus on inflation, interest rates and energy costs. Those factors remain important, but they don't change the fundamentals that underpin quality commercial property investments.

Businesses still need places to work, operate and serve their customers. Communities still require the infrastructure and services that support population growth. Well-positioned assets with strong tenant relationships continue to play an important role in meeting those needs.

That's why our focus remains unchanged, as we continue to prioritise assets in sectors supported by long-term demand, coupled with active management that keeps us close to tenants and responsive to changing market conditions.

Drivers of long-term value

Across the property sector, there is renewed focus on the drivers of long-term value.

With term deposit rates lower than they were 18 months ago, many investors are reassessing how they balance income, growth and diversification within their portfolios.

At the same time, improving transaction activity is creating greater visibility around pricing and market value. For long-term investors, periods like this can present opportunities to access quality assets at a point in the cycle where confidence is still rebuilding.

As we've seen throughout previous market cycles, opportunities often emerge before confidence fully returns.

A shifting investment landscape

The investment environment is also shifting. As term deposit rates continue to decline from recent highs, many investors are reassessing how they position their capital and where they can find resilient long-term income. Commercial property is increasingly returning to the conversation as investors evaluate opportunities across different asset classes.

At the same time, stronger transaction activity is helping establish clearer pricing benchmarks across the market. For investors focused on long-term outcomes, periods of uncertainty can often help create opportunities to secure quality assets while maintaining a disciplined investment approach.

Looking ahead

As we move towards the end of the year, the outlook appears more constructive than it has for some time. We expect the recovery to continue gradually, supported by improving economic conditions, increased transaction activity and growing investor engagement. Not every sector will move at the same pace, but the foundations for further improvement are strengthening.

For us, the focus remains simple: quality assets, strong tenant relationships and disciplined active management.

Those are the fundamentals that matter in any market, and they're the foundations we believe will continue to create value over the long term.

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Disclaimer: The information in this blog is general and current as of October 2026. It is not intended as regulated financial advice under the Financial Markets Conduct Act 2013 and does not consider your specific circumstances. PMG does not provide financial advice. Please consult a licensed financial advisor before making investment decisions.