Auckland’s industrial and commercial land has hit its highest price on record, with average values climbing to $1,190 a square metre in the year to March, according to fresh data from realestate.co.nz. That is the strongest level seen in at least a decade and represents a rise of more than 600 percent from where prices sat ten years ago.
The squeeze is showing up in every part of the listings book. The average asking price for an industrial building in Auckland has now ticked above $3.5 million for the first time, while the average size of industrial properties on the market has collapsed to just 1,864 square metres, down from 5,212 square metres a decade ago. In other words, buyers are paying record amounts for sites that are barely a third of the size they used to be.
New commercial and industrial land listings across the region have fallen 4 percent over the past year, from 211 to 203, according to RNZ’s reporting on the figures. With supply that thin, even small parcels are attracting multiple competing offers and the kind of bidding tension that used to be reserved for inner-city residential sites.
Realestate.co.nz chief executive Sarah Wood said the problem was now structural rather than cyclical. “There simply isn’t enough development-ready land coming to market to meet demand, and that is now being reflected clearly in pricing,” she said. Wood added that the shortage “affects where businesses locate, how supply chains are structured, and the cost of operating across the wider economy.”
The gap between demand and supply is most visible at the southern edge of the metropolitan area. Stephen Hughes, chief executive of Drury South Crossing, told the data team that his company had sold more than 100 hectares of industrial land in the past five years and only about 30 hectares of stock remained. At current rates of take-up that pipeline is on track to run dry well inside the next development cycle, leaving Auckland with very few large greenfield options south of the harbour bridge.
Hughes also flagged a quieter constraint that is starting to bite. Modern logistics, manufacturing and warehousing tenants now expect significant electrical capacity for automation, refrigeration and electric vehicle charging fleets, and many older industrial sites in places such as Penrose, Mount Wellington and East Tamaki cannot deliver it without substantial network upgrades. “Many older sites simply can’t support that without significant upgrades,” Hughes said. That is pushing tenants to chase the limited stock of newer estates and pushing up prices for the few sites that already have the wiring in place.
The buyers absorbing this stock are increasingly local. Realestate.co.nz noted that demand has been driven mostly by domestic investors over the past year, while international activity has eased back. That is a shift from the late 2010s and early 2020s, when offshore funds and listed property trusts based in Australia were heavy buyers of Auckland industrial portfolios. Higher hedging costs, a softer New Zealand dollar and political uncertainty around the upcoming election appear to have cooled cross-border appetite, leaving New Zealand syndicates, family offices and owner-occupiers as the main bidders.
That has knock-on effects well beyond the property sector. Auckland accounts for around 38 percent of national GDP, and warehousing and distribution capacity in the region underpins the cost of moving goods through the rest of the country. When industrial rents rise, supermarket logistics costs rise. When industrial land becomes too expensive to subdivide, smaller manufacturers struggle to find premises and either move to Hamilton and Tauranga or simply shelve expansion plans. The current pricing trajectory suggests both of those pressures will intensify through 2026 and into 2027.
Comparable pressure is starting to appear in the wider commercial market. CBRE’s 2026 market outlook earlier in the year flagged industrial as the most resilient asset class in New Zealand, with vacancy in prime Auckland industrial space still hovering near historic lows even as the broader economy struggles. The contrast with the office sector, where vacancy has continued to creep up in older B-grade buildings, could not be sharper.
Planning settings will shape what happens next. Auckland Council’s revised Future Development Strategy was supposed to free up additional industrial-zoned land at Drury, Wiri and out toward the airport, but consenting timelines and the cost of bringing services to greenfield sites have slowed actual delivery. Several developers privately argue that without faster decisions on Watercare and Vector connections, even rezoned land will not translate into available stock for several years.
For tenants and small businesses, the practical message is uncomfortable. The era of being able to buy a 5,000 square metre site on the urban fringe for a few million dollars is, for now, over. Anyone planning to expand a workshop, set up a distribution hub or move out of a leased premises into something they own should be budgeting for higher land costs, smaller footprints, and longer search timelines.
Have you tried to buy or lease industrial space in Auckland recently? What is the situation looking like in your suburb or sector? Share your experience in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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