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A survey of international investors see the downturn in the economy as a positive reason for further investment, alongside last year's change in government.
The latest merger and acquisition (M&A) report by legal firm Simpson Grierson indicated there had been a significant uptick in foreign investor interest, with a survey of 90 previous investors seeing value in New Zealand targets.
Nearly all (98 percent) were considering further investments within the next five years, with 40 percent planning to invest in the next 12 months.
It said New Zealand's own economic challenges had created more favourable conditions for investors, with 47 percent citing it as a reason to invest, with less competition, lower valuations and expectations for a return of economic growth.
Simpson Grierson corporate partner Anastasiya Gamble said New Zealand's recent economic challenges, combined with early signs of recovery create the perfect conditions for offshore investors to re-enter the market.
"Local equity market valuations also present an opportunity having been weighed down by several quarters of negative growth and the relatively shallow capital pools available in New Zealand," she said.
All these factors combined were seen as fertile ground for investors seeking returns.
She said a number of NZX-listed companies, including Comvita, Rakon and SkyTV, had been the target of recent takeover approaches, though offers did not meet expectations of value.
Corporate partner James Hawes said a change of government had also increased investor confidence with 57 percent of respondents reporting that this had increased their intention to invest in New Zealand.
"The government has won friends among the international investment community by recognising that, in a country of only five million people, international investment is critical for the delivery of basic services," Hawes said.
"The most obvious example of this, is the energy sector which, as a result of insufficient generation, has seen unsatisfied demand and a surge in wholesale energy prices putting significant pressure on retailers.
"The government, to its credit, has sought ways to resolve this including a reversal of the Labour government's ban on oil and gas exploration and plans to import liquified natural gas."
Hawes said long-term commitments on infrastructure, that go beyond the three-year political cycle, were also helping.
"The new coalition government recognises this issue and is seeking to address it, not only by packaging and commissioning multiple projects together - making it more difficult to reverse - but also by seeking broad political consensus on a 30-year pipeline of projects."
He said the current centre-right government was seen as being more supportive of foreign investment than the previous centre-left government.
"It has been a tough year for our local economy with GDP contracting and inflation staying high, but the 2025 outlook appears rosier: the flat local economy has created favourable investment conditions, meaning we're expecting to see a return to growth.
"Notwithstanding recent global economic and geopolitical challenges, survey findings tell us that Aotearoa/NZ maintains its global reputation as an open, politically stable, and legally robust member of the Asia-Pacific group," Hawes said.
