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Global CRE Investment Volume Jumps 34% in Q1 2022

Despite the worldwide geopolitical and economic uncertainty, global commercial real estate investment seemed undaunted, growing by 34% year over year in Q1 2022 to US$282 billion. According to a CBRE report, investment increased by 47% in the Americas, 25% in Europe, the Middle East and Africa (EMEA) and 5% in the Asia-Pacific region.

Multifamily investments led the way for the sixth straight quarter. Investment in the sector totaled US$76 billion, an 18% year-over-year jump. Office beast out industrial and logistics for the second highest volume, increasing by 44% for a total of US$82 billion. Meanwhile, retail had the highest year-over-year growth rate at 65% for a total of US$33 billion, while industrial and logistics grew by 41% to total US$61 billion.

In the Americas, the multifamily sector accounted for 40% of the investment volume total (US$58 billion), while the industrial and logistics sector comprised 22% of the volume ($US$36 billion). In Europe, the story was somewhat different, with office investment volume leading the way at US$34 billion, a 73% year-over-year increase. CBRE analysts indicated that “investors were particularly focused on prime assets that meet sustainability standards.” Multifamily volume fell by 23% from the year before, to US$18 billion, due to a lack of for-sale assets.

Asia-Pacific investments were led by retail, which reported US$4 billion, a 46% year-over-year increase. Meanwhile, office investment volume fell by 7% to US$15 billion (but is anticipated to increase later in 2022 as occupancy levels begin to recover) and industrial and logistics volume dropped 2% to US$5 million.

While global investment volume pushed forward despite myriad concerns, CBRE analysts believe that this might not be the case moving forward. With increasing commodity prices, supply chain disruptions and continued strong consumer demand drive inflation, central banks will continue tightening monetary policy. This means higher interest rates and more economic uncertainty could put downward pressure on investment volume.

CBRE forecasts that the total 2022 global investment volume will be 2% less than the record volume reported in 2021, with the largest decline (-5%) experienced by the EMEA.

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