Changes in retail behaviour are continuing to influence demand in New Zealand’s industrial property market, with logistics and supply chain activity taking a larger share of warehouse space, according to CBRE’s New Zealand Real Estate Market Outlook 2026.
The report points to a shift in how consumers interact with retailers, combining in-store browsing with online purchasing. That change is flowing through to how goods are stored, moved and delivered, placing greater emphasis on distribution networks rather than traditional retail footprints.
In Auckland, logistics and retail-related occupiers account for around 41% of prime industrial space, up from 34% in 2019, CBRE data shows. Over the same period, the city’s prime industrial stock expanded by approximately 1.6 million square metres, with more than half of that growth taken up by logistics and retail-linked operations.
Zoltan Moricz says the scale of that expansion reflects sustained demand from these sectors. “Between 2019 and 2025, the prime industrial occupier market in Auckland expanded by 1.6 million square metres, with logistics and retail-related occupiers accounting for more than half of that growth.”
The findings point to a structural shift rather than a short-term cycle. Industrial property demand is increasingly tied to supply chain performance, with occupiers prioritising proximity to population centres, transport access and operational efficiency.
Leasing activity remains steady, although decision-making has become more selective. Claus Brewer says occupiers are weighing long-term network requirements against global uncertainty, including freight costs, lead times and supply chain risk. “We’re seeing occupiers remain active but highly disciplined in their decision making.”
On the supply side, the pace of new industrial development is beginning to ease following several years of elevated construction. While stock levels increased significantly between 2020 and 2025, forward supply is expected to moderate.
Vacancy rates are expected to peak below 3%, with supply and demand dynamics forecast to rebalance from 2027 as new development slows.
Rental conditions remain softer in the near term, particularly in Auckland, reflecting the volume of recently completed space. However, improving demand is expected to support a return to modest rental growth.
From an investment perspective, secondary-grade assets are positioned differently in the current cycle. Bruce Catley says secondary industrial property is expected to deliver stronger total returns relative to income, while prime assets continue to attract demand due to their defensive characteristics.
Sustainability is also emerging as a structural factor. CBRE identifies a gap between occupiers’ emissions targets and the buildings they currently occupy, suggesting future demand for higher-rated industrial stock.
The report indicates that industrial property demand is increasingly linked to supply chain requirements, as businesses continue to adapt to changes in retail behaviour and logistics networks.