NEW ZEALAND Trends and Developments Contributed by: Briar Shaw, Julia MacGibbon, Kate Hatwell, Tina Liu, Jessica Phillips and Natalie Foster, Tompkins Wake
are expected to strengthen further in 2026. Vacancy levels in key sectors, including the Auckland office and retail markets, appear close to a cyclical high, and conditions are expected to improve through 2027 if supply remains restrained while occupier demand gradually firms up. The office sector warrants close attention. For much of the past decade, employment growth has not translated consistently into additional office take-up, but that relationship now appears to be narrowing. Increasing employment, particularly in professional and financial services, is expected to translate more directly into demand for quality space. Investors who have maintained positions through the softer period are well placed to benefit from this re-rating as it takes hold. Looking further ahead, the government’s ongoing reform of the Resource Management Act has direct implications for the commercial development pipeline. A faster, more certain consenting regime will reduce cost and time risks facing developers, and is expected to improve the feasibility of projects that have stalled at the planning stage. For investors with a develop - ment horizon beyond 2027, the cumulative effect of the RMA reform on pipeline delivery will be positive. For businesses considering their real estate strategy in New Zealand, the current environment offers oppor - tunities that were not available 12 months ago. With incentives still elevated and landlords motivated to secure quality tenants on longer terms, the negotiat - ing dynamic favours occupiers. Those entering the market or renewing leases in 2026 should expect to achieve materially better commercial terms than ten - While the commercial development market has been cautious, the public infrastructure pipeline has provid - ed a consistent and substantial source of construction activity. Budget 2026 committed NZD7 billion of capi - tal investment to infrastructure, reinforcing the gov - ernment’s focus on physical infrastructure as a driver of long-term economic growth. This commitment has kept major contractors active and sustained a signifi - ants who transacted at the peak. Infrastructure: a durable pipeline
cant portion of the construction workforce through the market downturn. This pipeline is not simply a short-term stimulus meas - ure. Many of the projects currently in delivery or pro - curement represent multi-year programmes that will provide forward workload well into the next electoral cycle, regardless of the outcome of the 2026 election. For businesses in engineering, professional services and specialist construction, positioning for this pipe - line is a strategic priority. Here too, the RMA reform is a relevant factor: a streamlined consenting regime will shorten the lead time from project approval to con - struction commencement, making the overall pipeline more predictable and reducing the holding costs that have historically eroded project returns. One structural risk, however, deserves attention. Capability in the construction sector has become increasingly concentrated around large infrastruc - ture and health projects, and there are real questions about how the market adapts as that work eventu - ally shifts geographically or phases down. The risk is that capacity has left the system and when broader demand returns, cost pressure will follow very quickly. International investors and developers with a medium to long-term horizon in New Zealand should factor this dynamic into their project planning and procurement strategies, particularly if they are targeting delivery windows beyond 2027. A New Competitive Landscape: Commerce Act Reform Changes to New Zealand’s competition law are aimed at strengthening the merger regime, address - ing concentrated markets and predatory pricing, and streamlining Commerce Act processes and reducing uncertainty. The Commerce (Promoting Competition and Other Matters) Amendment Bill was introduced to Parliament in December 2025 and was reported back from Select Committee in June 2026. The changes likely to be brought into force by mid-to- late 2026 are directed at improving legal certainty for businesses, reducing unnecessary compliance costs, and ensuring that regulatory tools are targeted, pro - portionate and fit for purpose. The headline reforms include the following.
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