In 2019, global commercial investment fell by 2% annually.

 

2019 Investment Flows Were Affected by Political Unrest and Brexit

CBRE, an international property consultancy, said this week that worldwide commercial real estate investment activity in the fourth quarter of 2019, including entity-level agreements, was practically flat (-0.5%) compared to the fourth quarter of 2018, while full-year volume declined by 2%. real estate agent

In the fourth quarter of 2019, EMEA saw significant investment activity, gaining 19 percent year over year and compensating for the preceding three quarters' lull. In Q4, investment volume in the Americas declined 6% year over year, while it decreased 27% in APAC.

Frequently Asked Questions about the Global CRE Market in 2019:

In Q4 2019, global commercial real estate (CRE) investment, including entity-level deals, totaled US$326 billion, a 0.5 percent decrease from Q4 2018. Global volume decreased somewhat (-2% ) in 2019 compared to 2018.

In Q4, worldwide CRE investment volume increased by 9% year over year to US$324 billion, excluding entity-level agreements. Excluding entity-level deals, worldwide volume increased by 5% year over year.

In Q4, EMEA investment activity increased by 19% year over year, with high levels of investment across the continent.

In 2019, Paris was the most popular destination for foreign capital in EMEA. Dublin has also piqued the curiosity of international investors.

In the fourth quarter, total Americas investment volume declined 6% year over year, while full-year volume declined 2% to $569 billion. However, excluding entity-level transactions, the United States saw its largest single-quarter volume in a decade, up 11% year over year. In Q4, investment in Canada and Mexico also rebounded significantly. The region's total volume softened as a result of an 86 percent drop in entity-level transactions in the United States.

In 2019, the United States accounted for roughly half of all global CRE investment volume. Despite limited worldwide market supply, low global bond yield expectations, and declining hedging costs, investors should continue to favor U.S. CRE, which might help the mergers-and-acquisitions market rebound.

In Q4, EMEA investment volume increased 19% year over year, but full-year volume declined 2% to $352 billion. Investment activity decreased year over year in Spain (-44%) and France (-3%), but increased in the United Kingdom (27%) and Germany (3%). (55 percent ). The full-year volume in the United Kingdom decreased 19%, owing partly to the extended political uncertainty surrounding Brexit, but full-year volumes in France (12%) and Germany (8%) rose moderately and reached new highs. Despite historically low prime yields, other European markets continued to draw capital in 2019, with double-digit full-year growth in Ireland (58 percent), Sweden (56 percent), Austria (39 percent), and Italy (37 percent).

 

Big-ticket deals and restored investor confidence boosted investment volumes across Continental Europe, with deal sizes more than $100 million up 9% year over year. In addition, office and residential properties remained the most appealing. Across Europe, investment levels remained robust, with mergers and acquisitions a common occurrence. In addition, the European Central Bank's decision to decrease interest rates and resume quantitative easing boosted investment levels in the third quarter. Capital will likely look to a strengthening U.K. market and Central and Eastern Europe for stronger returns on CRE investments in 2020, while Western European markets continue to produce poor rates.

In Q4, APAC investment volume declined 27% year over year, while full-year volume declined 2% to $131 billion, which was still higher than the five-year average of $125 billion. The drop in transaction volume was attributed to fewer large-ticket transactions than in Q4 2018, as well as a major drop in Hong Kong investment volume due to ongoing political unrest. The fourth quarter volume in Hong Kong was the lowest since the global financial crisis in 2008.

Nonetheless, in H2 2019, several key APAC regions saw a rise in investment volume. Domestic investors increased their investments in Australia and China, while investment volume in Korea reached a new high, with office and logistics assets in strong demand. In 2019, Japan continues to attract money, owing to its high yield spreads.

The Wuhan coronavirus outbreak poses a risk to regional investment confidence, with Greater China projected to have a slow start in Q1 2020. Investors are likely to slow down their investments while they wait to learn the full magnitude of the outbreak.

In Q4, global cross-border investment volume increased somewhat, although it was still down 7% year over year. Cross-border investment declined 20% year over year in 2019, following a spectacular year in which three of the five greatest quarterly cross-border volumes on record were recorded. Cross-border investment fell in all three regions, with the United States leading the way (-54 percent) due to slowed mergers and acquisitions activity. Cross-border investment in EMEA increased by 21% in the fourth quarter alone. In Q3 2019, Paris overtook London as the top EMEA destination for foreign capital for the first time on record. Dublin attracted a lot of investor interest, especially in Q4, owing to investor confidence about the Brexit settlement.