January 21 2026 | Deals | M&A Advisors
Asset recycling may emerge as one of the most significant – and politically charged – influences on New Zealand's economic landscape in 2026, potentially reshaping infrastructure investment and becoming a decisive election issue. In our 2026 Global M&A Predictions Report , Dean Alderton and Anna Buchly, Partners at leading New Zealand law firm Bell Gully, provide critical analysis of how government policy, economic recovery, and foreign investment dynamics are converging to create both opportunities and challenges in the M&A market.
With New Zealand's infrastructure assets valued at NZ$287 billion but facing a significant renewal investment gap, and with cost-of-living pressures creating mixed economic conditions across sectors, Alderton and Buchly offer nuanced insights into which industries will thrive and which will struggle as the country navigates toward recovery in the year ahead.
Here’s the full interview
Asset recycling may be one of the biggest influences on the economic and political landscapes in 2026.
Several Government-owned assets may be wholly or partially privatised to "recycle" cash back into the economy, including to support increased infrastructure spending and other government growth initiatives, and this could be a vote decider for many New Zealanders when they head to the polls next year, said Dean Alderton and Anna Buchly, Partners at legal firm Bell Gully.
"From a policy setting perspective, we expect some of the parties in the current coalition government to seek a mandate to look at an asset recycling policy initiative if they're re-elected. So, what does that mean? We could potentially see some government owned or controlled entities transacted (fully or partially) to third-party owners," said Alderton.
New Zealand's infrastructure assets were valued at NZ$287 billion in 2022, according to a 2024 report by engineering consultants Aurecon. However, the renewal investment in these assets has not kept pace with depreciation over the past 30 years.
If a wide-spread asset recycling scheme comes into force next year it could generate funding for much-needed infrastructure across New Zealand, however it will first need to overcome potential concerns around the issue of rightful ownership.
"The government's trying to get local government to think about whether they are the right owners of certain assets as well and obviously that's a pretty politically charged space," Alderton said.
"You've got a lot of ratepayers and councilors who don't want councils to sell airport shareholdings, port shareholdings, other significant infrastructure assets - they think their council is the best custodian of those assets. However, that's viewed through a very narrow lens that property ownership is key and without any campaign of education about the counterfactual."
"There is rightfully a focus on councils potentially diversifying their investments to generate better returns because they are not the natural owners of certain assets, we're in a situation of large and unsustainable rate increases, and there are councils that are really treading water (or in some cases even drowning) to maintain and fund their existing infrastructure, let alone investing in new infrastructure. But there's understandably a lot of push back from ratepayers to councils and councilors to hold on to those assets."
While global events such as the war between Russia and Ukraine and new tariffs imposed by the US overshadowed the market in 2025, there is now increasing confidence in a more robust 2026.
New Zealand's economic recovery is being driven by its agriculture sector, which is a large exporter. However, cost of living expenses continue to be a burden on many and weaker house prices have also impacted consumer spending.
"Cost of living for people is very expensive and sectors are getting impacted, like retail, which is also meaning that the recovery in the economy is very mixed," Buchly said.
"In big cities, Kiwis are very much impacted by house prices and… everyone feels very poor, even though it probably doesn't change what's coming into their household income."
Despite this, economic conditions are predicted to lift and result in more deals struck across various industries with the exception of retail, which may still lag throughout 2026, she warned.
"We are starting to see some positivity in the economy, particularly in the regions, which will, I think, give a little bit more comfort to people to do deals," Buchly said.
"Transactions in key industries will continue, particularly infrastructure, technology and the telco space. I think deals are still going to struggle in retail, fast-moving consumer goods, anything retail linked."
A rosier outlook for 2026 also means more foreign investment for New Zealand, broadening the existing buyer pool.
"The current coalition government has been very focused on saying, 'We are open for investment' since they were elected, including through changing some of the settings in our Overseas Investment Act, like the processing timelines. They are delivering on this, and that certainly assists overseas investors in assessing regulatory risk when looking at New Zealand assets," Alderton said.
"I also think at that smaller to medium deal size, some of the settings the government's brought in around immigration is leading to increased investment by overseas investors. Some of these people are very sophisticated, well-networked and wealthy offshore investors who own a range of different asset classes and are seeking to invest in New Zealand – we need to continue to foster this interest, including all the benefits their investment brings to New Zealand."
Looking ahead
New Zealand faces a pivotal year in 2026 where policy decisions around asset recycling could fundamentally reshape infrastructure investment and government balance sheets – while simultaneously testing political waters ahead of elections. The mixed economic recovery, with regional strength but urban cost-of-living pressures, creates a nuanced M&A environment where sector selection will be critical. Infrastructure, technology, and telecommunications offer compelling opportunities, while retail-linked businesses face continued headwinds.
For foreign investors, the government's clear "open for business" stance, combined with regulatory streamlining and attractive immigration settings for high net worth individuals, presents a welcoming environment. Success in 2026 will require sophisticated understanding of both the economic fundamentals and the politically charged questions around asset ownership that may define New Zealand's investment landscape for years to come.
