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Commercial investment volume increased 34% year-over-year in the first quarter

According to new data from CBRE, the global volume of investment in commercial real estate increased by 34% year-over-year to reach $282 billion in the first quarter of 2022. Investment increased by 47% in Americas, 25% in EMEA and 5% in Asia-Pacific. . Note that all investment totals and percentage changes quoted in this report are in US dollars.

Multifamily was the largest sector for the sixth straight quarter, with investment totaling $76 billion in the first quarter, up 18% from a year ago. Office overtook industrial and logistics for the second largest volume in the first quarter with $82 billion, a 44% increase from the first quarter of 2021. Industrial and logistics volume increased by 41% year-over-year in the first quarter to reach $61 billion, while the retail sector had the highest year-over-year growth rate (65%) for a total of $33 billion.

Americas volume up 47%

CBRE reports that despite high inflation and rising interest rates in the United States, commercial real estate investment volume in the Americas grew 47% year-over-year in the first quarter to $160 billion. dollars.

The multifamily sector accounted for $58 billion or 40% of total investment volume in the first quarter in the Americas, up 40% from the same period last year. The markets with the highest volume of multifamily investments in the first quarter were Dallas ($4.9 billion), New York ($4.1 billion) and Los Angeles ($3.7 billion).

The industrial and logistics sector accounted for $36 billion or 22% of total investment volume in the first quarter of the Americas, up 50% year-on-year. Although sales of individual assets slowed slightly in the first quarter, transactions at the entity and portfolio level helped boost the total volume of investments. Assets with below-market rental rates and leases that renew in the short term are experiencing the greatest demand from investors, as strong fundamentals provide the opportunity for outsized short-term returns from a financial perspective. of the market.

The office sector accounted for $35 billion or 19% of total investment volume in the first quarter in the Americas, an increase of 52% compared to the first quarter of 2021. Excluding transactions at the level of the entity, offices overtook industry and logistics for the second largest investment volume in the first quarter.

Accounting for 10% of total investment volume in the first quarter, the retail sector saw a 79% year-over-year increase to $18 billion. The outlook for retail investment this year looks good, with many entity-level and portfolio-level transactions underway.

The office sector leads the surge in European investment in the first quarter

European investment volume grew 25% year-on-year in the first quarter of 2022 to $93 billion, according to CBRE.

Office investment volume increased by 73% to $34 billion. Investors have particularly focused on prime assets that meet sustainability standards. Lower quality assets have been more difficult to value as investors try to determine how much investment is needed to bring buildings up to sustainability standards.

The volume of industrial and logistics investments totaled $20 billion in the first quarter, up 41% compared to the first quarter of 2021. Notable volumes in the first quarter of 2022 and year-over-year increases were recorded in Norway (1.8 billion dollars, +969%), in Spain (1.1 billion dollars, +391). %), Germany (5.0 billion dollars, +108%) and Italy (752 million dollars, +89%). Investor interest in the area is being spurred by rising rents due to low vacancy rates and strong e-commerce demand.

Retail investment volume increased 56% year-on-year in the first quarter to $11 billion. Norway and France recorded their highest retail investment volumes in the first quarter. Consumer spending was boosted by the easing of COVID-related mobility restrictions.

Multifamily investment volume fell 23% year-over-year in the first quarter to $18 billion. The slowdown was largely due to a lack of assets to sell.

Lower office and industrial volumes in Asia Pacific offset by higher retail volume

Asia-Pacific investment volume grew 5% year-on-year in the first quarter to $29 billion.

Office investment volume fell 7% to $15 billion, but is expected to increase later this year as occupancy levels begin to recover. Australia, Singapore and Korea accounted for 57% of total first quarter office investment in the region.

The volume of industrial and logistics investments fell 2% year-on-year in the first quarter to $5 billion. Strong market fundamentals and competition are expected to lower prime logistics returns in the months ahead, although the rising cost of funding will limit any such move in key markets such as Australia and Korea.

Retail investment volume totaling $4 billion in the first quarter of 2022 was up 46% year-over-year. As borders gradually reopen and COVID infections decline, investors are taking a more realistic view of prices as there aren’t many distressed properties available.

Global Forecast

Rising commodity prices and supply chain disruptions amid strong consumer demand have fueled inflation around the world. As central banks tighten monetary policy, higher interest rates and greater economic uncertainty will likely weigh on investment volume. CBRE expects total global investment volume this year to be around 2% lower than the record volume of 2021. EMEA is expected to experience the largest decline (-5%), largely offset by growth in Asia-Pacific (+ 5%). The volume of investments in the Americas is expected to fall about 1% from 2021 levels, concludes CBRE.


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