Following the money: Europe has been the biggest beneficiary of an increase in global capital diversification
Of the almost $1 trillion spent on commercial real estate around the globe in the 12 months ended March 31, 2019, one-third involved cross-border investment. In its Active Capital report for 2019, Knight Frank puts this large proportion of globe-trotting capital down to a need for large investors’ to both diversify risk and chase enhanced returns.
To fulfill these two criteria, says John Mulqueen, head of offices EMEA at CBRE Global Investors, global capital places great emphasis on enduring structural forces and tends to be active in markets that were fastest to recover following the most recent downturn. This has meant, in practice, increased capital allocation into both logistics and residential — identified by Colliers International earlier this year as the world’s fastest-growing real estate sectors.
Colliers’ findings also chime with the 2019 Institutional Investors Real Estate Trends report, compiled by Kingsley Associates and Instituti