A shortage of suitably-zoned commercial and industrial land is pushing Auckland’s property market to record-high levels. The pressure is also being felt in other parts of the sector, with the average asking price for industrial buildings in the Queen City now at over $3.5 million for the first time, new data from realestate.co.nz shows.
Drury South
Auckland’s industrial and commercial land values have reached an average of $1190 per square metre in the 12 months to March 2026, up more than 600 percent from 10 years ago.
The average asking price for industrial buildings in Auckland is now at record levels as well, signalling the lack of availability of well-located sites in the country’s largest market.
At the same time, the average land area of industrial properties available for sale has fallen to a record low of 1864 sqm, from 5212 sqm a decade ago, a decline of more than 64 percent.
Search data indicates demand is being driven primarily by domestic investors, with international activity easing over the past year.
While macroeconomic factors have slowed transaction volumes in recent years, particularly for land, the underlying shortage of development-ready sites continues to place upward pressure on pricing when assets do come to market.
Chief executive of realestate.co.nz Sarah Wood, says the region remains the primary hub of the New Zealand economy, contributing 38 percent to national GDP.
“The step-change in land prices over the past two years in particular isn’t a typical movement. It reflects a situation where supply is no longer keeping pace with demand.
“This is shifting development patterns, with access to suitable sites increasingly dictating how and where projects can occur, particularly for larger-scale industrial users.
“Over time, that affects where businesses locate, how supply chains are structured, and the cost of operating across the wider economy,” she says.
Stephen Hughes is the chief executive of Drury South Crossing, the country’s largest mixed-use development.
“Businesses are placing a premium on land that is build-ready and well connected to transport modes, power and fibre.
“In a constrained market, those locations are becoming harder to secure and that is flowing directly into pricing. Developments such as Drury South Crossing are becoming increasingly rare, with only a small number of large, industrial-zoned sites still available for purchase,” he says
“We have sold more than 100 hectares of land at Drury South over the past five years, and with just 30 hectares remaining, we won’t be able to accommodate every requirement. “
Hughes says rising electricity demand is also reshaping site requirements, with many existing industrial locations unable to support modern business needs.
“It’s not just data centres, it’s everyday businesses needing more power for automation, machinery and electric vehicle fleets, and many older sites simply can’t support that without significant upgrades.”
Wood says new commercial and industrial land listings have fallen over the past year, from 211 to 203, reflecting the limited supply conditions.
“Addressing this will require faster zoning, better infrastructure and a more proactive approach to planning commercial land supply,” she says.
“Buyer activity on the platform is strengthening, with commercial search volumes up 12 percent over the past year, while active users in the sector have increased 21 percent over the same period.
“Commercial for sale property searches increased 12 percent in the 12 months to March 2026, with a lift in engagement from domestic investors and occupiers. According to our search data, international interest has softened, suggesting the current upswing is being driven primarily by local capital.”
“When we see more people searching, more activity in the market, and rising values, it typically indicates momentum is building.
“If these trends continue, we expect stronger transaction volumes through the rest of 2026.
“Over time, this risks pushing industrial activity further from key centres, increasing transport costs and reducing supply chain efficiency,” she says.
