Cross-regional outflows
Global outflows from North America increased by 12% year-over-year in H1 to US$35.6 billion. Europe received a record high amount, as U.S. investors took advantage of favorable dollar exchange rates. North American capital to APAC decreased by 24% year-over-year in H1 but was 6% above the previous five-year average. North American outflows to the Middle East, South America and Africa were all down moderately year-over-year. Europe received 86% of all North American cross-regional outflow, the highest amount since the Great Financial Crisis.
Capital outflow from Europe fell by 12% year-over-year in H1 to US$4.1 billion, as more than 90% of the region’s total investment capital was deployed either domestically or in other European countries. Three-quarters of European capital was invested in the country in which it was raised, while 15% flowed to another European country. The U.S. office and industrial sectors garnered nearly all the limited cross-regional European outflow in H1.
APAC’s outflow surged by 67% year-over-year in H1 to US$13.5 billion. The region had the highest percentage of total investment capital deployed across regions at approximately 20%, compared with only 9% of North American and 3% of European capital. Approximately three-quarters of APAC outbound capital went to Europe.
Cross-regional outflows by region
Source: CBRE Research 2022, Real Capital Analytics.
Cross-regional outflows by sector
The office sector attracted 48% of global outbound capital in H1, followed by the industrial & logistics sector with 30% and the residential sector with 11%.
North American capital outflow was in line with the global average, with the office, industrial & logistics and residential sectors attracting 48%, 30% and 13% of total outflow, respectively.
European investors had the most evenly distributed cross-regional outflow across sectors, with office receiving 37%, industrial & logistics 22% and residential 20%. The hotel sector garnered 13% and the retail sector 8%.
APAC investors overwhelmingly preferred office assets, which attracted approximately 60% of the region’s total cross-regional outflow. Industrial assets attracted just under one-third, while hotels garnered 6%.
Cross-regional outflows by sector
Source: CBRE Research 2022, Real Capital Analytics.
Outflows by market
Twenty-one foreign markets received North American investment of more than US$200 million in H1, 14 of them in Europe. London received the most with US$3.9 billion, nearly doubling the amount in H1 2021. Four German cities—Hamburg, Berlin, Dusseldorf and Frankfurt—accounted for one-fifth of the North American outflow to Europe. In APAC, North American outflow to Singapore increased by 817% year-over-year in H1 to US$978 million, representing a 130% increase from the H1 2017-2021 average of US$424 million.
European cross-regional outflow was concentrated almost entirely in established North American markets, with just over half going to Seattle, New York, Los Angeles and Washington, D.C. Singapore was the only APAC market to receive a significant amount of capital from Europe at US$219 million.
APAC investors heavily targeted London, attracting US$5.7 billion or 40% of APAC’s cross-regional capital outflow in H1. Brussels attracted US$662 million, up 37% from the previous five-year H1 average. Six North American markets attracted more than US$200 million each from APAC investors, but total capital flows to North America remained below pre-pandemic levels.
Cross-regional outflows by market
Source: CBRE Research 2022, Real Capital Analytics.