North America was the only capital source to increase overall commercial real estate allocations in 2018 compared to 2017 (volumes increasing by 17% year-on-year to $546bn), according to Cushman & Wakefield’s Global Investment Atlas 2019, although all global regions were active buyers. 

The Global Investment Atlas concludes that 2018’s record high volumes in commercial real estate, at 4% year-on-year growth, will continue through 2019, driven by steady rental growth and stable yields, and market diversification in the face of evolving monetary policy and geopolitical tensions.

Commercial real estate allocations in Asia-Pacific fell 1%, while Europe, Middle East and Africa (EMEA) went down by 2% in 2018.

At $866bn, Asia-Pacific investors maintained the overall highest share of investment volumes in 2018. Asia-Pacific investment volumes are forecast to increase by 1% and reach $875bn in 2019. Development sites were the most targeted sector in the region, representing 80% of the market. The office and industrial sectors surpassed previous records, and the hotel market reached its strongest point post-global financial crisis.

EMEA investment volumes were $331bn in 2018, and are expected to increase by 2.5% and reach $339.2bn in 2019. European retail faced its third consecutive year of decline, while industrial and office transactions decreased by 24.7% and 9.7% year-on-year respectively, but could be due to a shortage of investible stock. Demand increased across a growing range of new sectors and Tier 2 cities.

Latin America recorded the lowest transaction volumes in almost 10 years in 2018 due to political upheaval in Brazil, Colombia, Costa Rica and Mexico. Investment volumes are forecast to increase by 6% and reach $2.4bn in 2019. Asia-Pacific investors are increasing their exposure to the region, however, and Chinese investment into logistics facilities is expected to continue.

When looking at cross-border real estate investment in isolation, the Global Investment Atlas reports a 10.7% increase, accounting for $405bn. EMEA retained its position as the most sought-after destination for international capital, while North America was a top source of cross-border investment capital.