Commercial real estate investment worldwide is expected to recover in the second half of 2024 after notching a “subdued” fourth quarter to end the past year, according to the real estate firm CBRE.
By the numbers, global commercial real estate investment volume fell by 37% year-over-year in Q4 2023 to $157 billion. Accordingly, the full year of 2023 saw annual volume fall by 47% year-over-year to $647 billion.
The culprits for that stumble were high interest rates, tight credit conditions, and a global economic slowdown, which are expected to continue inhibiting real estate investment activity in the first half of the year, CBRE said in a “Global Investment Brief.”
However, if sunny economic forecasts hold up and central banks begin cutting interest rates as expected in Q2, financial market volatility will ease and investment activity should begin to recover in the second half of this year, CBRE said.
"The decline in global commercial real estate investment volume reflects the challenging economic conditions and market uncertainties faced in the past year particularly inflation,” Richard Barkham, CBRE's Global Chief Economist, said in a release. “As central banks move start to cut interest rates and market conditions stabilize, we anticipate a recovery in investment activity in the second half of 2024. This presents opportunities for investors to re-engage in the market and capitalize on potential value."
