Where is NZ's best commercial property outside of Auckland?

Commercial real estate isn't just a vehicle for capital growth and strong yields - it's the infrastructure upon which our entire economy is built. Without commercial property, there is nowhere for businesses to thrive or consumers to get what they need. Even the rapid advent of online shopping requires bricks and mortar stores from which goods are sourced. 

Traditionally, Auckland has been the focal point for any commercial investor looking for growth. But given the overheating market of the last few years, it's prudent to look outside the City of Sails for commercial opportunities - you might be surprised by what you find. 

Canterbury 

The post-quake rebuild of Christchurch has driven incredible levels of commercial property construction - Statistics NZ data shows that the value of consented non-residential work more than tripled from 2010 through to 2015.

Construction levels in Christchurch remain high in a post-quake environment. 

While this included many government, education and public transport facilities, commercial property in Caterbury nontheless remains a strong performer. Realestate.co.nz data shows the average asking price for commercial property there has steadily risen to above $1.6 million in the last 12 months - approximately $1,800 per square metre. For Q2 2017, the types of commercial property with the most metres available were industrial buildings, commercial land and office buildings. 

Central Otago/Lakes District 

As Auckland's market slows down, Central Otago (and in particular Queenstown) have emerged with strong growth figures. While Westpac has identified hotel construction as one type of commercial activity that is difficult to get off the ground in this region, other styles of real estate have shown consistent price increases.

In Q2 this year, more than 6,000 square metres of retail space had been listed.

Realestate.co.nz statistics show that in Q2 this year, more than 6,000 square metres of retail space had been listed - the most available land in five years. At an average of $792.53 per square metre, it is also significantly more affordable (based on our listings) than Auckland or Canterbury. 

Where else? 

While bigger cities like Wellington will always have demand for commercial property, Westpac's 2016 industry insights report indicated that certain sectors are going to remain flat. For example, the government's move to reduce its footprint will continue to free up space, keeping demand satiated for the time being.

The flow of buyers (both residential and commercial) out of Auckland should also continue to have a ripple impact on upper North Island towns and cities like Hamilton, Tauranga and Rotorua. Tracking residential growth, migration flows and available land can give commercial investors a clearer picture of where their wealth can grow - these suggestions are just the beginning.

For more information on growth in New Zealand's commercial markets, contact the team at realestate.co.nz.