Intelligent Investment

Global Real Estate Capital Flows H2 2022

Global cross-border investment in H2 2022 mirrored the broader market slowdown

April 28, 2023 10 Minute Read


Executive Summary

  • Cross-regional capital flows between North America, Europe and Asia-Pacific totaled US$38.6 billion in H2 2022, down by 49% from H2 2021. This decrease is in line with the 46% drop in overall investment for the three regions in H2 2022.
  • While global cross-regional investment in H1 2022 was at near record levels, foreign investment activity was muted in H2 due to worsening macro-economic conditions, rising interest rates and difficulty obtaining financing.
  • Including all global capital (Middle East, Africa, South America), Europe had the most cross-regional capital inflow in H2 2022 with US$31.4 billion, followed by North America with US$6.9 billion and Asia-Pacific with US$4.4 billion. Europe saw a 26% decrease from H2 2021, while North America and Asia-Pacific had declines of 53% and 78%, respectively.
  • North American outflows in H2 2022 totaled US$25.6 billion, down 36% from H2 2021, while outflows from Asia-Pacific totaled US$8.1 billion and Europe US$4.9 billion.
  • Multifamily assets were particularly sought after, garnering 21% of all global cross-regional capital in H2 2022—almost all in Europe and North America.
  • Cross-regional investment activity is expected to increase late this year as interest rates stabilize and the macro-economic outlook becomes less uncertain.


Global cross-regional capital flows totaling US$38.6 billion in H2 2022 mirrored the broader market slowdown, decreasing by 49% compared with H2 2021. The reduction was largely caused by rising interest rates, as central banks battled inflation globally and debt financing was more difficult to obtain or came with less favorable terms. Asia-Pacific and North America had particularly large reductions. In North America, the rising cost of debt and foreign exchange rates made it difficult to underwrite deals, while the decrease in Asia-Pacific was largely driven by narrow yield spreads and COVID-related uncertainty. Cross-regional investment in Europe was relatively resilient, especially due to the weaker euro and pound relative to the U.S. dollar.

Cross-border volume decreased for all major commercial real estate sectors year-over-year in H2 2022. By share of total volume, the multifamily and retail sectors had the biggest year-over-year increases (10 and 6 percentage points, respectively), while the office and industrial sectors had the biggest decreases (-2 and -16 percentage points, respectively). The office sector accounted for 32% of total volume, followed by industrial with 28%, multifamily 21% and retail 12%.

Largely due to favorable foreign exchange rates in H2 2022, U.S. investors accounted for a greater share of cross-regional investment flows than in years past. Europe remained the largest beneficiary of cross-regional investment, attracting 75% of all global capital between the three major regions.

However, European investors remained the smallest contributor to the global cross-regional investment pool as most deployed their capital within the continent.

Top Regional Inflow & Outflow

*H2 2022 percent change relative to the 5-year H2 2017-2021 average.
Note: All figures in US$.
Source: CBRE Research, MSCI Real Assets, 2023.

Investment trends by region

North America

Cross-regional investment in North America totaled US$6.9 billion in H2 2022, down by 78% from H2 2021 and the lowest H2 volume since 2010. Higher financing costs, a weakening macro-economic environment and a strong dollar were largely responsible for this decline. North American office assets, which historically have commanded most of the cross-regional capital flow, had lower levels of investment. This was due to questions about the long-term fundamentals of the sector, especially related to occupier demand.

The 10 North American markets most targeted by cross-regional investors were the same as in H2 2021. Washington, D.C. received the most cross-regional inflow at just under US$944 million, more than half of that total attributable to one office building acquisition by a major Japanese investor. Dallas was the second most-targeted market with US$645 million, followed by New York with US$604 million. In addition to Dallas, three other Sun Belt markets were among the top 10: Los Angeles (US$542 million), Atlanta (US$499 million) and Austin (US$197 million).


Cross-regional capital flows to Europe fell by 26% year-over-year in H2 2022 to US$31.4 billion. Favorable dollar-to-euro and dollar-to-pound exchange rates attracted more U.S. investment capital to the region, contributing to North American investors’ 72% share of total cross-regional capital flow to Europe.

London attracted the most cross-regional investment of any global market in H2 2022 with US$4.6 billion. Asia-Pacific investors accounted for 82% (US$3.8 billion) of that total, in part due to the market’s continued attractiveness and reduced pricing. Meanwhile, the Paris (IDF) retail sector saw increased interest due to the city’s hosting of the 2024 Olympics. Industrial assets in Paris (IDF) were also heavily targeted. Four of the top 10 cities for inbound cross-regional capital were in Southern Europe, including Milan, Barcelona, Lisbon and Madrid.

North American investors showed a strong preference for high-yielding industrial assets in secondary U.K. cities. U.S. investors were also behind one notable multifamily deal in Q4 2022 worth $US3.9 billion. It included the acquisition of the U.K.’s third-largest student housing provider, which includes assets with more than 23,000 beds across the country.


Cross-regional investment in Asia-Pacific decreased by 53% year-over-year in H2 2022 to US$4.4 billion, largely due to weak market conditions and China’s COVID-zero policy. Opportunities to take advantage of lower prices were also slower to materialize than in North America and Europe. Consequently, American investors, who historically account for the bulk of cross-regional investment in the region, focused on prime assets in major European markets.

Only two Asia-Pacific markets (Yokohama and New Delhi)—down from seven in H2 2021—received more than US$500 million in foreign inflows. Greater Tokyo (Yokohama) saw one US$831 million transaction in the office sector from U.K.-based investors. Japan was particularly attractive for global and regional investors due to long-term positive sentiment and lower cost of financing. Australian markets, such as Sydney and Melbourne, remained attractive but saw declines in cross-regional investment.

Cross-regional inflows by region

Source: CBRE Research, MSCI Real Assets, 2023.

Cross-regional outflows by region

Source: CBRE Research, MSCI Real Assets, 2023.

Cross-regional inflows by market

Source: CBRE Research, MSCI Real Assets, 2023.

Cross-regional outflows by market

Source: CBRE Research, MSCI Real Assets, 2023.

Investment trends by sector


Global investors are increasing their multifamily investment activity due to strong demand from many potential home buyers who have been priced out of the single-family housing market. Cross-regional capital targeting multifamily assets in Europe reached US$6.1 billion in H2 2022, a 50% increase from H2 2021.

Cross-regional investment in North American multifamily assets fell by 56% year-over-year in H2 2022 to US$2.3 billion, largely due to more conservative underwriting, higher interest rates and rising economic uncertainty despite relatively strong multifamily market fundamentals. In terms of market share, cross-regional investment in U.S. multifamily real estate surpassed total office investment volume in H2 2002 for the first time since CBRE began tracking the market.


There has been a noticeable drop in cross-regional investment volume to the North American office sector, largely due to still-prevalent hybrid working pattens causing less occupier demand. In the five years leading up to the COVID pandemic, 46% of cross-regional flows to North America targeted office assets. In H2 2022, this share dropped to 29%.

Conversely in Europe, where the return to the office has been more pronounced than in North America, cross-regional investors remain very interested in prime office assets. However, demand for secondary office assets has decreased, as location and ESG criteria increase in importance. The European office market accounted for more than two-thirds (US$8.6 billion) of total cross-regional capital flow to the sector globally in H2 2022.

Asia-Pacific office assets also commanded strong cross-regional deal flow, especially in major gateway cities. This is largely due to the region’s strong return to the workplace. In H2 2022, 52% of cross-regional capital to Asia-Pacific targeted office assets.


The retail sector displayed resilience across all regions in H2 2022. Cross-regional investment to the sector increased year-over-year in H2 2022 to US$3.8 billion in Europe and US$1.2 billion in Asia-Pacific. Convenience-focused assets, such as grocery-anchored shopping centers, were most attractive to investors.

In the U.S., very little new construction over the past 10 years has boosted retail market fundamentals. Despite this, foreign investors remained wary of the sector in H2 2022 with just US$52 million of total cross-regional volume.


Cross-regional inflows to the North American industrial sector totaled US$2.0 billion, an 86% decrease from 2021’s record level. This decline can largely be attributed to the strong U.S. dollar, higher interest rates and a worrisome economic outlook. However, industrial & logistics real estate fundamentals remained strong, with continued rent growth and steady occupier demand stemming from efforts to boost domestic supply chains.

In Europe, cross-regional industrial investment volume fell by 50% year-over-year to US$8.4 billion, likely due to a shortage of for-sale assets. As in North America, market fundamentals remain strong, in part due to occupiers’ desire to strengthen supply chains on the continent.

Cross-regional investment in the Asia-Pacific industrial market fell by 85% year-over-year to US$863 million, largely due to China’s COVID-zero policy and subsequent spike in infections after reopening. Strong demand from domestic investors also increased competition for available assets.

Cross-regional inflows by sector


CBRE Research, MSCI Real Assets, 2023.
*Totals featured under Global tab are aggregate values for the three regions.

Cross-regional outflows by sector


CBRE Research, MSCI Real Assets, 2023.
*Totals featured under Global tab are aggregate values for the three regions.


Global investors likely will remain cautious for most of 2023 as they analyze opportunities and the macro-economic environment. Capital flows and market dynamics may shift as global interest rates become more aligned and foreign exchange rates adjust. This may allow for more foreign investment in North America and Asia during the coming year. Overall, global investment activity is expected to begin increasing late in the year and continue recovering in 2024 as interest rates stabilize and macro-economic conditions improve. However, full-year volume is expected to be less than in 2022.

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