Proportion of private capital investors in NZ commercial property hits 7-year high – Bayleys

22nd April 2025 By Paul Yandall | paul@propertyticker.co.nz | @propertyticker

The proportion of private capital investors in New Zealand commercial real estate has reached a seven-year high, according to Bayleys.

The agent said its data showed 68% of $20m-plus buyers in 2024 were private investors, up from 47% in 2023.

Institutional investors made 16% of the $20m-plus buyer group, user and other investors 10% and syndicators made up around 6%.

“Many institutional investors have been challenged by the economic conditions and have been keeping a more careful eye on their balance sheets and existing portfolios, so have had less head room to look at buying,” Bayleys senior director of capital markets Jason Seymour said.

“Many private investors have significant cash reserves they’ve been sitting on for the past couple of years. The market came off that period of record-low interest rates and record-low yields, into an inflationary environment in which activity slowed significantly.

“That’s when private wealth gets active, looking for the right opportunities as assets are repriced. That’s a big part of why we’ve seen them take up a bigger slice of the market activity.”

The New Zealand figures tracked with Bayleys global partner Knight Frank’s 2025 edition of The Wealth Report, which found 25% of family offices with existing property portfolios were considering further purchases, with 44% looking to expand their exposure to commercial property over the next 18 months.

The analysis found that the assets of particular interest to global private investment were living, preferred by 14.3% of family offices surveyed, logistics at 13.2%, and luxury residential at 12.1%. 

The Wealth Report also found that of New Zealand’s family office property investments, 93% were domestic – the highest of any country surveyed – with Australia at 90% and the US at 86% as the next most domestically focused private investor regions.

“In a changeable environment investors feel safer investing in the local markets they are familiar with. It means they don’t have to take on currency risk and the challenges of locally funding offshore investments,” Seymour said.

“Investing domestically also taps into simpler legal and tax frameworks, strong and well-established property rights, and easier asset management all within a safe-haven market and relatively stable political system.

“The reasons that foreign investors are attracted to and invest in New Zealand are the same reasons that private buyers primarily invest domestically.”

Seymour added that New Zealand’s housing under-supply, population growth, and urbanisation, alongside booming demand in logistics due to e-commerce and supply chain shifts, were also driving investor interest in the living sector and warehouse assets.

“Private capital is attracted to the reliable income streams and comparatively lower vacancy risk in these sectors as well as their capital growth potential. None of these sectors have seen the high level of volatility witnessed in the office and retail sectors.”

Knight Frank’s The Wealth Report can be read here.