Cross-regional flows between North America, Europe and Asia-Pacific totaled $30.5 billion in the first half of 2023, representing a year-over-year decrease of 52%, according to CBRE’s Global Real Estate Capital Flows H1 2023 Report. The fundamentals driving this decline are well known: increased interest rates, softer real estate fundamentals and different pricing expectations between buyers and sellers. Additionally, CBRE analysts noted that less North American capital flow to Europe due to high interest rates, economic uncertainty and constrained debt markets could be attributed to the drop in cross regional investments.
Europe experienced a two thirds decrease from its previous year’s inflows ending at $14.7 billion; however it still remains as the largest recipient of cross regional investment by far with an influx totaling $45.9 billion during H1 2022 . Meanwhile international capital inflows into Asia Pacific decreased by one third from last year’s figure at 605 million dollars down 406 million dollars for this period while Japan received strong volume coming mainly from North America thanks largely due positive carry more favorable exchange rates lower finance costs .
North American saw an increase 5% compared with last years 11 point 2 Billion dollar inflow up 11 point 75 Billion Dollars , major acquisitions included Singapore based GIC 14 Billion Dollar buyout STORE Capital partnership Oak Street Real Estate Capital Partners & Japan Mori Trust Co Ltd 2Billion Dollar deal SL Green acquiring 49 9 percent stake 245 Park Avenue New York City . Major cities targeted foreign investors include Los Angeles Dallas Charlotte & Toronto Canada which saw highest ever half yearly total 2 point 25Billion Dollars 90 percent these funds coming Singapore targeting Calgary Montreal & Toronto Markets respectively . Industrial Logistics properties favored property type accounting 37 % share total Cross Regional Volume 4 8billion invested US industrial logistics properties 303 Million came Singapore Investors Retail sector also increasing20 % YoY mainly attributed GIC 14b buyout STORE Cap REIT cap rate expansion expected less other sectors near mid term Multifamily declined 40% YOY but investor demand remain high housing affordability issues increased household formation decreasing new development Office Sector dropped 80% YOY primarily because Europe though office fundamentals remain strong NA office sector limited APAC 69%.
