Active Capital: Trends Shaping Global Cross-Border Investment in 2025
Global cross-border capital flows showed resilience in H1 2025, with Q1 up 6% YoY and Q2 around 8% higher, despite market volatility. Investors are navigating a highly nuanced landscape, favouring safe-haven and high-potential sectors like logistics, innovation-driven assets, and well-located offices. Our latest insights explore the trends shaping Q4 2025.
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The start of 2025 showed promising momentum in global cross-border capital with Q1 2025 global flows +6% YoY according to MSCI RCA. A flurry of financial market volatility, underpinned by geopolitical uncertainty flattened some of this hubris, with thematics of investors taking stock, but also potential re-routing of capital flows, especially to those traditionally more liquid, safe haven commercial real estate markets. Despite this, cross-border global flows also finished Q2 around 8% higher.
Underlying uncertainty is unlikely to resolve in the short-term, meaning that ‘waiting it out’ is a trickier strategy. More active investors are leaning in to the opportunities from softening rates, a period of repricing and evidence of an early upswing in many global commercial real estate markets. Sensitivity and scenario analysis will be more important than ever before. It really is about noise, nuance and opportunity.
The nuance is illustrated by the variation in cross-border investment activity across, and within, regions in the first quarter. The momentum of inbound capital into Asia Pacific in the first quarter continued into the second, albeit EMEA continued to record the largest overall inbound volumes.
Looking to our forecasts for the year ahead, overall global volumes could be similar to last year, potentially with increased deployment from sovereign wealth funds (who have historically been more active at this point in the cycle) reflected by an expected uptick in outbound capital from the Middle East. We still expect the US to remain the largest global source of capital this year, albeit potentially at a slower outbound pace than in 2024, providing a further window opportunity for other investors.
In terms of sectors, those with structural tailwinds, i.e. beds and sheds are still finding favour albeit again with nuance across markets. Those sectors which benefit from innovation and the increases in defence spending are also likely to see continued / increased interest. In several locations we are also starting to see an increase in appetite in the office sector, very much for well-located offices with the right attributes and / or good bones to be refurbished or repurposed.
Private capital has been an important source of demand for some time, but as some sectors have seen repricing and as debt costs moderate, especially in those locations with an innovative mix of bank and non-bank lenders, this is also supportive of broadening liquidity.
One of the more positive signals so far this year is from Preqin, who found that the number of 2025 vintage core funds globally are already more than 80% of the total 2024 vintage, an early leading indicator of appetite for core.
Key Active Capital Trends Year-to-Date
- Based on RCA data, global cross-border activity across all sectors was up 7.6% year-on-year in Q1 2025 ($40bn). Regional variation remains significant:
- EMEA recorded $22bn of inbound activity (-4% YoY)
- APAC saw $10bn of inbound activity (+12% YoY)
- Americas registered $8bn of inbound activity (+48 YoY with sharp increases in locations including Mexico)
- The top five destinations for global cross-border capital YTD are the UK, US, Germany, Australia and Japan.
Sources of data (excl. Preqin data referenced above is MSCI RCA)