Amidst a landscape of tightening monetary policies, the global commercial real estate market faced a sharp decline in investment during the second quarter of 2023, sending shockwaves across the industry. According to recent data, the investment volume plummeted by a staggering 57% year-over-year, amounting to a mere US$142 billion. The economic ripples were felt across all regions, with investment plummeting by 63% in the Americas, 53% in Europe, and 25% in the Asia-Pacific region. Notably, every property sector witnessed a decline in investment, with the multifamily sector taking the hardest hit at -66%, despite maintaining its appeal to investors. In contrast, the industrial sector fared relatively better, experiencing a comparatively modest drop of 41%. The confluence of factors including elevated interest rates, stringent credit conditions, and lingering economic uncertainty in the United States and Europe has cast a shadow of doubt over the prospect of a swift rebound in commercial real estate investment for the remainder of 2023. Industry experts at CBRE have cautiously forecasted a further 34% decrease in global investment volume for the year, with a potential upward trajectory expected to emerge only in 2024, as market conditions hopefully regain their equilibrium.
Read CBRE’s report here