ACTIVE CAPITAL

What are the capital trends shaping commercial real estate?

Our Knight Frank Active Capital research forecasts global cross-border capital flows across key sector and investor types, tracking opportunities for 2024.
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Categories: Publication Active Capital

We forecast global commercial cross-border real estate investment for this year to recover to just below the post-GFC average with a backdrop of economic improvements and a pause in interest rate increases amid an outlook of evolving geopolitics.

We predict there could be a six to nine month window for investors to capitalise on current pricing before the anticipated recovery becomes a widely accepted view, although this window could well shorten across certain markets.  

Using the latest machine learning techniques and unique datasets our Knight Frank Capital Gravity Model forecasts the movement of real estate capital for 2024 across 19 key locations. This includes: Australia, Canada, Denmark, Finland, France, Germany, Greater China, India, Ireland, Japan, Netherlands, New Zealand, Norway, Singapore, South Korea, Spain, Sweden, the United Kingdom and the United States.

Top-5 global cross-border sectors 

  1. Logistics
  2. Residential 
  3. Office 
  4. Retail 
  5. Hotel 

Our forecasting model predicts global cross-border real estate flows for logistics & living sectors, which continue to enjoy structural tailwinds, to recover to levels similar to the post-2016 average.

The hotel sector could have the best year since 2018 off the back of improving economic growth in the hospitality sector. The retail sector may also see its best year since 2018.

Top-5 global sources of cross-border capital

  1. United States
  2. Singapore
  3. Canada 
  4. Japan
  5. United Kingdom

Japan could see its best year on record for outbound flows. We predict Japanese investors to mainly target the United States, the United Kingdom and Australia.

Singapore outbound flows are forecast to be also be above the long-term average, with the United States and Canada outbound flows to see recovery.

Top-5 global destinations for cross-border capital

  1. United States
  2. United Kingdom
  3. Germany
  4. Australia
  5. Spain

Sitting in second place, the United Kingdom is forecast to see inbound capital 10% above the post-GFC long-term average. We predict Australian inbound flows to be 17% above the long-term average and Spain is expected to see inbound investment 22% above the long-term average.

Explore our latest forecasts from our Capital Gravity model or read a summary of the results below.

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To read more from our Active Capital research programme, visit the homepage.