Commercial property in Tauranga is in high demand.
A new survey shows more than 50 per cent of respondents are confident in the future of investment in the city.
But real estate experts fear the city cannot keep growing if there is not enough industrial and commercial land to go around.
Collier International's latest Commercial Property Investor Confidence Survey showed a net positive 59 per cent of people expected conditions to improve in the next 12 months.
The net positive result (optimists minus pessimists) was the highest among 13 regions surveyed, beating Queenstown, Wellington and Auckland to the top spot.
Simon Clark, managing director of Colliers in Tauranga, said there was a huge appetite for quality stock among local and out-of-town investors.
"The best properties are selling fast and for record prices," he said. "This activity is being driven by the strength of the wider Bay of Plenty economy."
Bayleys Tauranga commercial manager Mark Walton said Tauranga's commercial confidence was largely driven by the Port of Tauranga and the kiwifruit sector, which was "a big consumer of land, buildings and labour".
However, Walton said there was a shortage of commercial and industrial land.
"People still see Tauranga as a bit of a safe haven," he said. "Tauranga can't keep growing, the kiwifruit industry can't keep growing and the port can't keep expanding if there is not enough industrial and commercial land."
Next stage of Pāpāmoa Plaza's expansion revealed
Business experts question Bay's low confidence in region's economy
Ray White Tauranga commercial and industrial specialist Philip Hunt said there was an air of positivity in the market. "But we most certainly have a shortage of industrial and commercial land," he said.
Priority One projects manager Annie Hill said a good indicator of sustainable economic growth was new businesses were still moving to Tauranga.
"The concern would only be if additional commercial land is not opened up for development in the next couple of years, where we would start to see an effect on new business being able to establish here," she said.
Tauriko Business Estate director Bryce Donne said land at Tauriko was "selling strongly".
Donne said a recent release of eight hectares of land was well-received by the market and most were now under contract.
"Confidence is strong in Tauranga at present and for good reason," he said.
"We have a strong port and a strong primary productive sector and a great climate and environment."
Donne said SmartGrowth was key to Tauriko Business Estate's success but the Global Financial Crisis shook everyone's confidence leading people to doubt some long-term projections.
"As a result, the city is now experiencing an infrastructure deficit and we are struggling to keep up," he said.
Colliers research and communications director Chris Dibble said 40 per of respondents said they intended to invest more now that the Tax Working Group's capital gains recommendations had been rejected.
Pāpāmoa land developed
A grassy patch of Pāpāmoa land that has sat vacant for more than 20 years is finally being developed.
This week, plans were revealed to develop one of the last pieces of prime commercial land in the area as part of the Papamoa Plaza's latest expansion.
Papamoa Plaza centre manager David Hill said the previous developer had bought the land on Gravatt Rd in 1998 with the intention of developing it in the future.
Hill said a big selling point when current developer Tinline Properties bought the site in 2013 was the potential to redevelop the land.
"Developing it was always part of the plan," he said. It sat underdeveloped all that time and we were itching to get started."
Tauranga City Council regulatory and compliance general manager Barbara Dempsey said the western part of 7 Gravatt Rd had been vacant since at least 1977.
A new BestStart childcare centre was underway and expected to be completed by Christmas, with the next stages to include an office block and large format retail.
An extra 150 car parks will be added and a ring road to divert trucks around the outside of the centre.
BestStart deputy chief executive Fiona Hughes said they wanted to transform what had been an empty grass area for 20 years into a place "where children and families can grow and thrive".
*A total of 1671 responses were used to the construct the commercial property survey results.