First-half transactions slower compared to last year, however
Led by resurgent investment in gateway markets, investments in commercial real estate around the world increased 17 percent quarter-on-quarter to USD231 billion in Q2 2019, CBRE reported today.
Investments in commercial projects rebounded in the Americas, EMEA and Asia-Pacific, with Berlin, Tokyo, Boston and San Francisco all reporting more than 50 percent in year-on-year growth of transaction values.
Strong leasing activity emboldened investors to capitalise on commercial assets, with deals in excess of USD100 million dominating the office sector.
“With the global economy in the 11th year of what is officially the longest cycle on record, investors want stable trophy assets to secure cash flows and for potential downturn protection,” CBRE researchers explained in a statement.
The Americas was the only region with year-on-year investment volume growth: up 0.7 percent to USD128 billion in Q2.
Investments rose in Japan, Singapore and South Korea—together they accounted for half of investment volumes across Asia-Pacific, which decreased 14 percent year-on-year to USD29 billion in Q2. Marred by uncertainty and economic downturn, Hong Kong, mainland China, and Australia posted significant declines in investment volume.
Currency weakness in China, however, is driving investments from the Americas and EMEA. Investment by Westerners in China grew by a staggering 329 percent between the first half of 2018 and the first half of 2019.
Year-on-year, commercial investment globally actually dropped 7.5 percent in Q2 2019. Investments in H1 2019 also totaled just USD428 billion, a decrease of 10.6 percent from H1 2018.
“A continued buoyant US market, coupled with restored fiscal expansion and monetary easing around the world, potentially supports a stronger second half of investment activity,” CBRE predicted, citing a potentially “hard Brexit” and trade disputes as headwinds.
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