$247B Invested In Global CRE During Q2
However, cross-border investment is at its lowest point since 2014.
Global CRE investment has hit pre-pandemic levels, as record amounts of dry powder that sat on the sidelines during the peak of the COVID-19 pandemic began deploying worldwide.
About $247 billion was invested in global real estate during Q2 2021, more than twice the amount invested a year ago, according to a new report from JLL. Investment activity is now on par with 2019 levels, thanks largely to robust pipelines and expanding vaccine access in the US, Germany, UK, and China.
“Rather than structural issues in financial markets, the economic downturn has been due to public health, and that’s meant liquidity can rebuild quickly,” says Sean Coghlan, global director of capital markets research and strategy at JLL. “With ample dry powder in the market, there’s a desire among investors to expand and diversify portfolios.”
But investors have stayed closer to home as continued travel restrictions limit cross-border deals. Cross-border investment is at its lowest point since 2014, according to JLL, and represents 29% of total investment volume.
Yet despite dampened cross-border activity, competition among investors is ticking up, and demand for scale is rising.
“There are more prospective buyers than on-market opportunities, creating more intense bidding processes,” Coghlan says. “Greater competition and the deep pools of capital targeting real estate are combining to drive up pricing – while at the same time bringing what have been lagging areas of the market back into focus.”
US investment volume increased 161% during Q2 to $112 billion, JLL data shows, driven by deals like the Boston Properties-Canada Pension Plan Investment Board co-investment program targeting marquee office properties in Washington D.C., Boston, Los Angeles, New York, San Francisco and Seattle.
In Europe, deal volumes ticked up 74% year-over-year, thanks mainly to activity in Germany and the UK.