Visión

Pace of capital formation and transactions strained by higher cost of capital

Global Real Estate Perspective November 2023

Investment | Explore other sectors >

The rising cost of capital and conservative underwriting are subduing the pace of transaction closings. Fundraising is more challenging in the current climate, as investors put additional allocations to the asset class on hold until denominator effect uncertainty subsides. Direct investment declined globally during Q3, down 46% year-over-year to US$131 billion. This brought year-to-date volumes to US$423 billion, reflecting a decrease of 50% and the lowest level of direct investment in over a decade. Cross-border investment trended similarly, decreasing by 56% year-to-date and representing the lowest share of cross border investment on record.

This article is part of JLL’s Global Real Estate Perspective

While all major sectors experienced notable declines during the quarter, sectoral outlooks in the short- and long-term are varied, as sentiment and performance across property sectors remain bifurcated. Office pricing and liquidity remain under pressure amid weak global sentiment from investors and lenders. Fundamentals across the regions reflect the increasing polarization in performance between the highest-quality assets and the rest of the sector. However, sentiment for logistics remains positive despite cooling fundamentals in the near-term and volumes declining globally, and markets in the sector have repriced quickly. The living sector remains the most active globally year-to-date, although fundamentals are more muted and settling around long-term averages.

Global Real Estate Perspective November 2023

This page is part of JLL’s quarterly Global Real Estate Perspective. Follow one of the links below to find out more about global real estate market trends and outlook by sector.

Investment

Pace of capital formation and transactions strained by higher cost of capital

Investment

Office

Structural and cyclical uncertainty weighs on activity

Office

Retail

Solid leasing demand in major retail destinations

Retail

Logistics

Activity squeezed by slowing economy

Logistics

Hotels

Performance elevated but growth is slowing

Hotels

Living

Rising interest in alternative living sectors

Living

Global Office Market Dynamics

The latest global office market dynamics

Global Office Market Dynamics

Summary

Return to the Global Real Estate Perspective homepage

Summary