Understanding New Zealand commercial property in 2026

In its final announcement for 2025, the Reserve Bank of New Zealand reduced the Official Cash Rate by 25 basis points to 2.25%, maintaining an accommodative stance as inflation trends closer to target. This decision continues a pattern of easing that’s already influencing investor behaviour across the country.

Lower rates mean cash and term deposits are delivering modest returns, prompting investors to look for higher-yielding, income-generating assets. Offshore demand for New Zealand commercial property remains strong, supported by favourable currency levels and policy settings. The latest rate cut reinforces a trend we expect to continue through 2026: capital is moving away from lower-return assets toward sectors with higher income and stronger fundamentals.

Fundamentals in focus
As the cycle evolves, not all commercial property assets will perform equally. Demand for well-located, well-leased assets remains solid, while secondary assets face a more challenging environment. Investors are increasingly scrutinising:

• Asset Quality: Location, building condition, and adaptability to changing tenant needs.
• Lease Profiles: The length and structure of leases, tenant diversity, and renewal risk.
• Tenant Strength: Financial stability, industry resilience, and engagement with property managers.

Active management and adaptability are becoming essential. Properties that demonstrate strong fundamentals and proactive asset management are likely to outperform, especially as market cycles become less predictable. For investors, understanding these drivers is key to making confident decisions in a changing landscape.

Building knowledge
In this environment, education and transparency are more important than ever. PMG’s Commercial Property Investment Guide is designed to help investors - whether new or experienced - navigate these shifts with clarity.

The guide covers:

• How to assess asset quality and tenant strength
• The impact of lease profiles on long-term returns
• Strategies for building a resilient, income-focused portfolio

By deepening your knowledge, you can make informed decisions that align with your investment goals and the realities of today’s market. Download the PMG Commercial Property Investment Guide here to explore practical insights and strategies for 2026 and beyond.

Disclaimer: The information in this blog is of a general nature and was current as at November 2025. 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. As with any investment, commercial property carries risks, including the risk of loss of capital. Past performance is not a guarantee of future results. PMG does not provide financial advice about whether an investment in one of its funds is right for you. Please seek advice from a licensed financial advice provider before making any investment decisions.