- Feb 10
- 3 min read
Commercial property is entering 2026 in a far more stable environment, relative to both recent years and the broader economic backdrop, but it is not a simple one.
Global volatility remains elevated, and conditions remain mixed across markets and sectors, underscoring the importance of selectivity and fundamentals.
To help investors navigate the year ahead, we asked Chris Dibble, Head of Research and Strategic Consulting at JLL New Zealand, for his perspective.
1. Where are the most compelling opportunities emerging across commercial property in 2026?
Industrial Industrial continues to present strong risk-adjusted opportunities for 2026. Vacancy remains structurally tight across major markets, even as supply has edged up modestly from historic lows, supporting rental stability and long-term income durability
Opportunities are strongest in:
Well-located logistics and distribution assets aligned to population growth and supply-chain resilience
Christchurch industrial, supported by its strategic role as the South Island’s primary logistics and distribution hub, with demand from manufacturing, transport and trade-related occupiers
Modern facilities offering scale, efficiency and strong ESG credentials, which continue to attract deep tenant demand
While economic conditions may see vacancy lift slightly, fundamentals remain supportive relative to long-term averages.
Retail Retail opportunities remain uneven but are becoming clearer as confidence improves and consumer spending stabilises. Performance continues to be polarised, with assets offering convenience, experience and strong fundamentals outperforming
The most compelling opportunities are in:
Large-format retail and convenience-led assets anchored by strong covenants
Shopping centres with strong catchments, essential retail mixes and active asset management strategies
Prime CBD retail and street-frontage locations with constrained supply, particularly in central Christchurch
Office Office opportunities in 2026 are increasingly selective, with performance driven by asset quality, location and relevance rather than a broad-based recovery. The flight to quality remains firmly entrenched, with demand concentrated in high-quality, well-located, well-amenitised and sustainable buildings.
Opportunities are emerging across:
Prime CBD assets, particularly in Auckland, where rental growth is forecast to be strongest
Well-located suburban offices and office parks, especially those on key arterial routes, offering accessibility, parking and flexibility aligned to hybrid work strategies
Value-add opportunities where older assets can be repositioned to meet modern occupier expectations around sustainability and workplace experience
Markets with elevated vacancy, such as Wellington, continue to offer selective opportunities for well-capitalised investors with a longer-term outlook.
2. What are the key challenges the commercial property sector will need to navigate in 2026?
While sentiment is improving, several structural and cyclical challenges remain as the market moves through the next phase of recovery.
Key challenges include:
A widening performance gap between high-quality and secondary assets, particularly in the office sector, is increasing obsolescence risk
Rising operating, insurance and compliance costs, placing pressure on net income and feasibility
Elevated vacancy and recent supply additions in certain office markets, requiring proactive leasing and asset management
Ongoing global economic and trade-related uncertainty is influencing occupier and investor decision-making
Successfully navigating these challenges will depend on active management, realistic pricing expectations and a clear focus on asset quality and long-term relevance.
3. What should current and prospective commercial property investors be most focused on in the year ahead?
As we start 2026, investors remain disciplined and increasingly selective, with a clear emphasis on resilience and long-term positioning rather than short-term cyclical gains.
Key focus areas include:
Asset quality, location and sustainability credentials, which continue to drive occupier demand and valuation outcomes
Income security, underpinned by covenant strength, lease structure and rental sustainability
Active asset management, including refurbishment, repositioning and tenant engagement strategies
Capital structure and timing, with OCR stability improving confidence, but pricing remaining value-driven
While global volatility may persist, commercial real estate’s income-producing characteristics and longer holding periods continue to support its role as a stabilising component within diversified investment portfolios.
Head here for more insights from JLL New Zealand.
