Global commercial real estate (CRE) investment volume fell by 31% year-over-year in Q1 2021.
A strong rebound is expected in the second half of the year on the back of economic recovery and widespread COVID-19 vaccinations.
The pandemic has affected global investment markets to varying degrees. Some showed great resilience and recovered rapidly, such as Paris, Tokyo, Los Angeles and Dallas. Others were harder hit, such as New York and London.
Industrial property investment remained strong in all three global regions. Hotel investment gained traction in the U.S. as prices dropped and distressed sales came to market. Core office and retail assets held up well in Asia Pacific.
Global CRE investment fell by 31% year-over-year to US$184 billion in Q1. On a trailing 12-month basis, volume was down by 33% from a year ago. Markets remained soft compared with 2019 but recovery is well underway in the Asia Pacific region, where Q1 volume increased by 6% year-over-year.
Countries with the highest vaccination rates, namely the U.S. and U.K., outperformed their peers in Q1 investment volume. Based on the current pace of immunization and the broader economic recovery, CRE investment should be near the pre-pandemic level in the second half (H2) of 2021.