Global CRE Investment Up 95% in Q3

Global commercial real estate investment has rebounded rapidly from the pandemic. According to the global brief from CBRE, global investment increased 95% in the third quarter with a total of $350 billion in investment volume. The activity brought the year-to-date investment volume to $800 billion, a 44% increase from 2020 activity and a 3% increase from 2019.

This investment activity doesn’t only indicate a recovery from the pandemic, but it also represents a return to pre-pandemic investment activity. In all three regions overviewed in the brief, Americas, EMEA and Asia-Pacific, investment activity was on par with 2019 activity. The report attributes the surge to widespread vaccinations and the subsiding delta variant. Ample liquidity and low bond yields are also driving investment activity.

While investor confidence has returned to the market, strategies shifted during the pandemic. Industrial and multifamily are by far the most popular assets. Interestingly, despite the global surge in ecommerce demand, multifamily acquisitions drove the high investment volumes, particularly in US, Germany and Sweden.

Industrial and logistics acquisition activity was also strong. Office and retail, assets, however, are still recovering from the pandemic.

The Americas was the most active market, with investment volumes up 152% in the third quarter and 74% year-over-year. Migration to the sunbelt markets supported the strong activity, and as such, multifamily deals dominated acquisitions. The total share of multifamily transactions increased to 39%, up from an average of 28% before the pandemic. This helped to office the dearth of office transactions, but the report expects trophy office deals to return.

In EMEA, investment volume grew by 56% in the third quarter and is up 10% for the year. Sweden, Netherlands, Germany and the U.K. were the most active investment markets. Asia-Pacific investment volume grew by 24% in the third quarter and is up 41% for the year.

Global investment has trended up since the beginning of the year. In February, an earlier report CBRE showed investment volumes up 84% from the previous quarter and totaling $290 billion. The activity was a good sign for recovery of the industry and returning demand; however, it wasn’t enough to offset the market dislocation for the year. Global capital was down 26% at the close of 2020. That trend has changed this year, returning to pre-COVID levels.