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 decline can be attributed to increased interest rates, softer real estate fundamentals and different pricing expectations between buyers and sellers as well as less North American capital flow to Europe due to high interest rates, economic uncertainty and constrained debt markets.
Europe saw the largest decrease with cross regional inflows dropping two thirds from the previous year’s total of $45.9 billion ending at $14.7 billion for H1 2023 while Asia Pacific experienced a one third drop from 2022’s figure of 6.$05 million down 4.$06 million in 2023.. Japan however received “relatively strong volume from North America” thanks largely positive carry exchange rate advantages along with lower finance costs . Meanwhile ,North American investments increased 5% over last year totaling 11$.75 Billion . Major acquisitions included Singapore based GIC’s 14$ Billion buyout STORE Capital REIT partnered by Oak Street Real Estate Capital Partners & Japan Mori Trust Co Ltd 2$Billion deal SL Green for 49%.9% stake 245 Park Avenue NYC . Other targeted cities include Los Angeles Dallas Charlotte & Toronto Canada which recorded its highest ever half yearly inflow at 2$.2Billion mostly coming Singapore investors mainly targeting Calgary Montreal & Toronto respectively
Industrial properties were favored by global investors resulting 10$.8billion Cross Regional purchases accounting 37% share overall transactions .. Of 4$.8b invested into Nth American industrial/logistics properties 303M came Singapore Investors .. Retail sector also enjoyed an increase up20 % YOY primarily due GIC 14$ Bn buyout STORE Captial REIT though cap rate expansion expected less than other sectors going forward … Multifamily declined 40 % YOY but investor demand remains high given housing affordability issues increasing household formation reduced new development… Office sector investment dropped 80 % YoY driven largely European market yet fundamentals remain strong there while Nth Am office limited H1 APAC 69%.
