Shortage of Auckland industrial land leads prices to soar
Friday, 24 April 2026
A shortage of suitably zoned industrial land in Auckland is pushing prices for development-ready sites to record highs, experts say.
But it is not just developers who will feel the impact of that pressure, they warn.
Realestate.co.nz has released new data showing industrial and commercial land prices rose to an average of $1190 per square metre in the year to March 2026.
That was the highest level recorded in a decade, and an increase of more than 600% from ten years ago.
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At the same time, the average land area of industrial properties available for sale had fallen to a record low of 1864 sqm, from 5212 sqm a decade ago, a decline of more than 64%.
And the data also showed the average asking price for industrial buildings in Auckland had climbed to more than $3.5 million for the first time.
Realestate.co.nz chief executive Sarah Wood said the data highlighted the structural shortage of commercial and industrial land in Auckland.
There was not enough development-ready land coming to market to meet demand, and that was now being reflected clearly in pricing, she said.
“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 would affect where businesses located, how supply chains were structured, and the cost of operating across the wider economy, she said.
Drury South Crossing in Auckland’s south is the country’s largest mixed-use development. Chief executive Stephen Hughes said developments like it were becoming increasingly rare in Auckland.
That was because there was a limited number of large, serviced, industrial-zoned sites across the wider region.
Businesses were placing a premium on land that was build-ready and well connected to transport modes, power and fibre, he said.
“But in a constrained market, those locations are becoming harder to secure and that is flowing directly into pricing.”
“We have sold more than 100ha of land at Drury South over the past five years, and with just 30ha remaining, we won’t be able to accommodate every requirement.”
Purchasers tended to take a conservative approach, and it could take a few years to make a decision, but over the last six months more deals had been coming to fruition, Hughes said.
“We are getting enquiries well in excess of what we can deliver, and prices depend on the size of the site, and the requirements of the buyer.
“Early movers can still secure a site, but the supply of greenfield industrial land at this scale across the region is becoming increasingly limited, and it’s a real challenge for the market.”
Rising electricity demand was also reshaping site requirements, with many existing industrial locations unable to support modern business needs, he said.
“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.”
Calder Stewart is the country’s largest developer and builder of industrial property. The South Island-based company buys as well as builds, and has more than 900 ha of industrial zoned land.
Ben Stewart, director of property at Calder Stewart, agreed that industrial zoned land was expensive in Auckland, and it was a reflection of the lack of available land.
But owning land unlocked opportunities for the company, and a few years ago they had decided it was important to own land in the Golden Triangle transportation hub of Auckland, Tauranga and Hamilton.
They ended up with 15ha development land at Drury South Crossing, which was already zoned and development ready, he said.
“The price we paid for the land reflected that it was development ready, but it gives us certainty over the delivery of land and we could start seeking occupiers for it.”
Since then they had built NZ Safety Blackwoods’ new automated 18,000 sqm distribution centre, and a 20,000sqm Rebel Sports / Briscoes distribution centre at Drury South Crossing.
Stewart said they had two more projects kicking off in their Drury holding, and were working closely with occupiers who would take the remaining 8ha of land.
“The size and scale of projects in Auckland are chewing up the land in Drury, and the broader lack of land supply is putting pressure on the sites available, with not much more set to come online anytime soon.
“We’ve quite a bit of land in Hamiton and Tauranga, but they are very different markets, and potential occupiers don’t compromise on location if they want to be in Auckland.”
Occupiers were actively looking for properties that would allow them to reduce their total costs, and increase efficiency, he added.
Chris Dibble, head of research at commercial real estate firm JLL, said elevated industrial land prices in Auckland were a symptom of the relatively restricted supply of land available.
But there were some pockets of development land across the region, including Drury South, in the Northwest, and a number of brownfield sites, he said.
“So there is a bit of opportunity and activity, and vacancy rates in Auckland’s industrial property sector have crept up to 3.2% now, from 1% at the peak of the cycle.
“That’s still below the long-term average of 4%, and it’s lower than in markets like Sydney or Melbourne, but there are a few more opportunities for occupiers.”