Private capital has market advantage

Private wealth remains the dominant force shaping global real estate markets, surpassing institutions as the primary driver of investment activity and powered by greater agility and fewer regulatory constraints.

Bayleys’ global real estate partner, Knight Frank reports in its 20th edition of The Wealth Report that private capital, namely ultra-high-net-worth individuals (UHNWI) and family offices, has led the way for five consecutive years, deploying US$464 billion in 2025.

With the firm estimating that around US$144 billion of institutional capital is preparing to re-enter the market this year, private capital’s advantage is crystalising with its speed of execution, flexible capital structures and higher risk tolerance allowing it to transact earlier in the real estate cycle.
With circa-89 new UHNWIs emerging each day around the world, more private capital is chasing a finite supply of high-quality assets, strengthening price resilience at the top end. The report highlights that private capital is increasingly opportunistic and mobilising across borders, intensifying global competition and creating pressure that will inevitably flow through to local markets.

Asia-Pacific cross-border capital is rebounding, with high-net-worth investment at its highest level since 2019. The New Zealand government’s refreshed Active Investor Plus Visa has attracted close to $4 billion in capital either invested or committed within its first year.

Commenting in the latest Total Property portfolio, Bayleys national director commercial and industrial and lead for the firm’s capital markets arm, Ryan Johnson says the mobilisation of global capital presents both an opportunity and a challenge for New Zealand.

“Property delivers control and visibility that financial assets simply don’t. There’s opportunity to attract globally mobile capital into next-generation assets, alongside the challenge of ensuring that infrastructure, policy settings and regulatory frameworks are strong enough to support that investment.

“Private capital is no longer simply present in the market, it is increasingly shaping the pace, structure, and execution of transactions. Bayleys’ data confirms a shift away from traditional institutional dominance for large-scale commercial and industrial assets, with private investors now setting the tone for the market.”

For vendors, rising private wealth expands the buyer pool and intensifies competition. For developers, it opens more flexible funding and partnership channels, and for investors, it signals a faster, more competitive market with decisiveness driving performance.

Bayleys director of capital markets, Jason Seymour notes that while domestic private capital is facing several headwinds, including geopolitical uncertainty, an election year, and ANZ’s forecast of three OCR increases in 2026, there are several counterbalances.

“These market conditions are opportunities for confident, counter-cyclical capital to acquire repriced assets in a lower competition environment and potentially acquire complete or partial interests in high-quality assets which may not be available to them in a stronger market.

“Those doors often close quickly as wider market confidence increases, capital constraints fall away, balance sheet pressure eases, and divestment strategies return to hold or acquisition.

“Now is the time for smart capital to be positioning for proactive targeted acquisition of assets both on- and off-market.”

The Knight Frank report reinforces that private investors are recalibrating, becoming more selective, more strategic, and increasingly focused on long-term value creation whether through development, intensification or lifting asset performance.

“We’re seeing this in New Zealand too, particularly across industrial and logistics assets, and to a certain extent, the office sector, where there’s still strong underlying demand,” says Johnson.

“We’re also seeing buyer interest diversify into alternative asset classes like digital-infrastructure assets, healthcare, and student housing where income is underpinned by structural demand rather than purely market cycles.”

Viewed through a global lens, New Zealand has intrinsic advantages given our tax framework, regulatory certainty, residency pathways, and broader growth prospects, with Johnson saying the country’s relative stability is a definite strength.

“The constraint is not capital but rather the scarcity of high-quality, investment-grade assets for those focused on long-term income durability and capital preservation.”

A sample of high-value investment sales transacted through Bayleys in the past 12 months, each secured by private capital, highlights the depth and diversity of buyer demand.

Notable transactions include Dress Smart Hornby in Christchurch, sold on‑market for circa $65 million to a joint venture between Oyster Management and Antipodean; Castle Rock Business Park, a 7.95‑hectare modern industrial precinct in Christchurch, sold off‑market for $61 million to Australian buyer Fife Capital; and 296 Peake Road in Cambridge, an A‑grade fully leased industrial asset, sold on‑market for $22.62 million to the Auckland‑based Hugh Green Group.

A four‑level standalone office and retail asset at 35 Teed Street in Newmarket sold on‑market for $19.3 million to an Auckland HNWI; and 33–43 Jackson Street in Petone, a substantial leased industrial holding on 1.1 hectares, sold on‑market for $18.4 million to a Wellington‑based HNWI.