Intelligent Investment

Global MarketFlash Global Investment Activity Remains Soft but Outlook Brightens

April 30, 2021 5 Minute Read

  • 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.

Figure 1: Global Commercial Real Estate Investment (US$ Billions - Fixed FX)

Graph showing Global Commercial Real Estate Investment (US$ Billions - Fixed FX)

Source: CBRE Research, Real Capital Analytics, Q1 2021.


APAC led the global investment recovery in Q1 with 6% year-over-year growth. Many markets, including China, Korea, Taiwan and India, recorded a stronger Q1 than the five-year average between 2015 and 2019. Q1’s year-over-year growth exceeded 50% in Taiwan, Australia, Singapore and India, offsetting softness in markets like Japan and Hong Kong. Recent COVID-19 resurgences in India and Japan are worrying, but the region is still largely ahead in economic recovery.

Industrial investment continues to grow in APAC. Industrial supply, including cold storage, and capital deployment in the sector continued to grow by double-digit rates, driven by the expansion of third-party logistics (3PL) and e-commerce platforms. Office investment made up 54% of APAC’s transaction volume in the past 12 months but fell by 9% year-over-year in Q1. The region’s fast-growing services sector will lead to stronger growth in office investment.

The retail and hotel sectors recovered steadily in APAC due to increased mobility and strong consumer spending. Year-over-year investment was up by 9% for retail in Q1 and down by 10% for hotels. In mainland China and South Korea, investors are seeking well-located hotel assets for conversion or redevelopment.

In an investor survey conducted before the recent COVID flare-up, Tokyo was the most preferred city for cross-border investment among APAC investors.1 Its resilience and liquidity are still highly desired by investors, particularly for core investment. Since the pandemic began, Seoul and Beijing have also demonstrated such qualities, contributing to the region’s relative stability (Figure A1). Sydney, Taipei and Auckland all posted rapid recovery in Q1, whereas Hong Kong, Shanghai and Melbourne have further to go as investors take a wait-and-see attitude.

Figure 2: Three Types of Investment Recovery - How Top Markets Diverged Under COVID-19

Line charts showing Three Types of Investment Recovery - How Top Markets Diverged Under COVID-19

Source: CBRE Research, Real Capital Analytics, Q1 2021.


Americas investment volume dropped 29% year-over-year in Q1, or 20% excluding entity-level transactions. No entity-level transactions closed in Q1, but some large deals are pending. Activity rebounded well in the U.S., Canada and Brazil but remained muted in other parts of the region.

The U.S., which accounts for 95% of the region’s activity, had a 28% year-over-year decline in Q1 investment volume, or 18% excluding entity-level transactions. U.S. investor sentiment has largely recovered following the latest US$1.9 trillion stimulus package and a lower COVID infection rate since February. Investors are seeking price discounts but there is appetite for risk. They are particularly attracted to Sun Belt markets with strong job growth.2

On a sector level, hotel investment volume grew by 14% year-over-year in Q1, boosted by Colony Capital’s US$2.8 billion portfolio sale. Large-ticket hotel sales should continue in 2021, as many operators face liquidity issues that will lead to lower pricing. Blackstone and Starwood Capital are reportedly closing a US $6 billion acquisition of the Extended Stay hotel chain.

Industrial investment remained strong in Q1, followed by multifamily. Excluding entity-level transactions, industrial and multifamily investment volume fell by 3% and 15%, respectively, year-over-year in Q1. Retail investment volume fell by 44% year-over-year, while office volume fell by 34%. Single-tenant assets drove activity in these two sectors due to more clarity on occupancy and rental income.

Some markets, such as Boston, Charlotte and Raleigh/Durham, have exhibited great resilience over the past 13 months, with similar 2020 and 2021 investment levels that were on par with the five-year average. Other markets, including Los Angeles, Dallas, Seattle and Atlanta, have recovered rapidly, closing the year-over-year volume gap in the past six months. Many Tier I cities like New York, San Francisco, Washington, D.C, and Chicago were harder hit and their Q1 volume stayed low due to uncertainty and a wait-and-see attitude by investors. These markets await a transition to normalcy upon a large-scale reopening of office and retail properties.


EMEA investment volume decreased by 41% year-over-year, or 29% excluding entity-level transactions. Q1 2020 was the region’s strongest Q1 on record. On a trailing 12-month basis, European markets averaged a one-third drop in investment volume. Switzerland, Denmark and the U.K. managed to keep the pandemic under relative control and led the region’s investment volume. Other large markets like Germany, France, the Netherlands and Sweden had different degrees of COVID-19 resurgences and all reported year-over-year decreases in Q1 investment volume of more than 40%.

The COVID-19 resurgence and prolonged lockdown measures weighed on investor sentiment. EMEA investors remained risk-averse, focusing on industrial and core office transactions.3 Q1 industrial investment increased by 2% year-over-year, led by the U.K., Germany and Sweden. Office and residential investment fell by 43% and 41%, respectively, due to fewer large transactions and for-sale properties.

Travel and mobility restrictions continued to hamper the reopening of retail and hotel properties. Investment volume in both sectors fell by more than 50% year-over-year in Q1. However, as vaccinations ramp up in European countries, a gradual relaxation of travel and business restrictions will start in Q2 2021 and lead to restored confidence and more capital deployment.

Cities like Paris, Berlin and Milan were resilient thanks to growth in industrial or multifamily investment on top of stable office investment. Markets that exhibited rapid recovery included Frankfurt, Copenhagen, Helsinki and Barcelona. The pandemic’s negative impact was severe in London, Amsterdam and Madrid, where Q1 investment volume fell short of previous years. Some “wait-and-see” markets reported slow recovery in office investment and some others had disproportionally low levels of industrial investment.


Successful vaccine rollouts and pandemic control have improved the global economic outlook. With further economic recovery, global CRE investment is expected to rebound strongly in H2 2021 when workers return to the office and travel resumes. More “wait-and-see” markets will undergo rapid recoveries. CBRE estimates that global investment volume will increase by approximately 15% to 20% in 2021.

Figure 3: Total Value of Commercial Real Estate Investment Transactions (US$ Billions)*

Table showing otal Value of Commercial Real Estate Investment Transactions (US$ Billions)

Source: CBRE Research, Real Capital Analytics, Q1 2021.
*Values include entity-level transactions and exclude development sites.
**In order to calculate global totals, local currency values are converted to US$ using the most recent quarterly FX rates of Q1 2021. This calculation eliminates currency impacts over time and generates the same growth rates as in local currencies.


The seasonally adjusted volumes are shown in Figure A1. These give a more accurate picture of transaction activity from quarter to quarter across any one year.

Figure A1: Seasonally Adjusted Investment Volume (US$ Billions - Fixed FX)

Line chart showing Seasonally Adjusted Investment Volume (US$ Billions - Fixed FX)

Source: CBRE Research, Real Capital Analytics, Q1 2021.

1 Learn more in CBRE’s Asia Pacific Investor Intentions Survey 2021.

2 Learn more in CBRE’s Americas Investor Intentions Survey 2021.

3 Learn more in CBRE’S EMEA Investor Intentions Survey 2021.

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