Worldwide Investment Activity Stays Subdued in Q4

Recovery Expected in H2 2024

Executive Summary

• Global business genuine estate financialinvestment volume fell by 37% year-over-year in Q4 2023 to UnitedStates$157 billion. 2023 yearly volume fell by 47% year-over-year to UnitedStates$647 billion.
• Investment volume fell throughout all areas year-over-year in Q4: by 42% in the Americas, 24% in Europe and 37% in Asia-Pacific. For the year, volume fell by 50% in the Americas, 46% in Europe and 29% in Asia-Pacific.
• All commercial genuine estate sectors taped year-over-year Q4 and yearly decreases in volume.
• High interest rates, tight credit conditions and a worldwide financial downturn will prevent genuine estate financialinvestment activity in the veryfirst half of the year.
• If main banks start cutting interest rates as we anticipate in Q2 and monetary market volatility relieves, financialinvestment activity must start to recuperate in the 2nd half of this year.
• CBRE projections that worldwide financialinvestment volume will boost by 7% in 2024, with volumes up by 5% in the Americas, 10% in Europe and 5% to 10% in Asia-Pacific.

Figure 1: Global Commercial Real Estate Investment Volume (US$ Billions Floating) 

Source: CBRE Research, MSCI Real Assets, Q4 2023. 

Elevated Interest Rates Continue to Weaken Investment in the Americas

Americas commercial genuine estate financialinvestment volume fell by 42% year-over-year in Q4 to UnitedStates$86 billion and by 50% on an yearly basis to UnitedStates$375 billion. Although the 10-Year Treasury yield fell by 1 portion point over the course of Q4, fairly high loaning rates and unpredictable financial and organization conditions slowed financialinvestment activity.

Multifamily financialinvestment fell by 54% year-over-year in Q4 to UnitedStates$27 billion and by 60% for the year to UnitedStates$122 billion. Multifamily stayed the most chosen sector for financiers and lendinginstitutions in Q4, however a wave of brand-new supply will be a drag on internet operating earnings this year, especially in Sun Belt markets.

Industrial financialinvestment fell by 43% year-over-year in Q4 to UnitedStates$22 billion and by 40% on yearly basis to UnitedStates$100 billion. Industrial stayed an appealing sector for financiers due to strong basics. We anticipate more sellers this year offered liquidity in the sector and increased redemption demands of genuine estate funds.

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