Global Real Estate Investment: Get ready for a resurgence in cross-border real estate acquisitions
The globalisation of real estate as an investment class will continue in 2022.
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In work undertaken for our Active Capital report, we apply the latest modelling techniques to show that 2022 is likely to be a record year for global cross-border capital flows. The US, the UK, Germany, France, and the Netherlands are forecast to be the most popular destinations for real estate capital. We expect a resurgence of interest in the office sector, as well as continued growth in residential and industrial investment. The US, Canada, the UK, and Germany are forecast to be the largest sources of cross-border capital, dominated by investment managers, institutions, and private equity investors.
Last year, our Capital Gravity model predicted that in 2021, the US would be the top destination for global cross-border real estate capital, followed by the UK, Germany, Australia, and France. Now, as we watch the US and the UK vie for the top spot at the time of writing, followed by Germany, Australia, and France, we can see that our forecasts and modelling techniques have passed the predictive test.
For 2022, our forecasts show that UK offices are likely to be a top destination for US capital, driven particularly by private equity firms as they invest into new markets and ride the recovery. In addition to UK offices, US private equity money is forecast to target the core European markets of Germany, France, and Spain, as well as further afield in Japan and India.
Overall, the office sector globally is expected to account for just over half of all cross-border investment volumes, indicating that interest in offices remains very much alive, even as we continue to see a rotation of assets by investors, particularly private equity, into industrial, residential, life sciences, and data centre property.