The real estate industry has to deal with and adapt to big changes in the commercial and industrial property market as a result of the upheaval in global financial and investment markets.

Writing in Bayleys' latest Total Property magazine, Mike Bayley, managing director of Bayley Corporation, says this international turbulence has had a substantial effect on property market confidence, but it has also opened up significant opportunities for counter-cyclical investors.

Bayley says there are now marked contrasts in levels of activity across different value segments of the market, with little happening in the $10 million plus sector but a good level of interest remains in properties under $1 million.

"Investors switching out of residential property and farmers with cash are helping nudge this sector of the market along. The old adage that 'no deal is too small' has particular applicability for real estate agencies in the current market."

He says evidence of the resilience of the lower-value end of the market was provided last week when nine out of 10 commercial and industrial properties put up for sale at a Bayleys Wellington auction sold at a total value of $6.1 million, with prices ranging from $160,000 to $1.25 million. All but two of the sales were in the $1 million or under price bracket.

Mark Hourigan, a director of Bayleys Wellington, says there was multiple bidding on all the properties with a good mix of owner-occupiers and investors competing on the auction floor.

Hourigan says commercial and industrial property is seen as reasonably stable and secure by investors, given the huge volatility being experienced in other investment markets.

"We're witnessing a number of new investors coming into the market at present, some of whom are moving out of equities. With fixed-deposit rates moving down, we're also starting to see investors moving money out of the banks back into investment property."

Bayley says transactions are still being concluded in the middle segment of the market between $1 million and $10 million, but activity has slowed.

"As a consequence of the reduced amounts of finance available, we are seeing a re-emergence of the trade market where properties or other assets are exchanged to help make transactions happen. A number of our senior agents are revisiting their experiences with trades in the late 80s and early 90s to keep this sector of the market ticking over."

In a recent example of a trade deal, a property in Allens Rd, East Tamaki, has been exchanged as part of the sale of a larger industrial property in Settlement Rd in Papakura that is currently occupied by Croxley Stationary, but will be vacant on settlement.

DNZ Property Fund has sold the 8896sq m factory, warehouse and office building on a 4.05ha site on the corner of Settlement Rd and Dominion Rd for $5.5 million to an owner-occupier.