Key Takeaways
• The global economic outlook dampened in Q1 2022 with persistently high inflation and rising interest rates fueling uncertainty in financial markets. Volatility continues.
• Global commercial real estate investment volume increased by 34% year-over-year in Q1 to US$282 billion. Investment increased by 47% in the Americas, 25% in EMEA and 5% in APAC. We expect momentum to continue in Q2.
• Cap rates continued to fall in Q1. However, rising borrowing costs may bring the compression cycle to an end in the Americas and EMEA.
• We expect investment volume will finish 2022 slightly off the record volume of 2021 due to slower economic growth.
• A strong U.S. dollar will make markets in EMEA and APAC attractive to U.S. investors, while higher hedging costs likely will hamper foreign capital flows into the U.S. The yen is at an historic low, which will attract foreign investors to Japan.