Total global commercial real estate investment turnover reached $828 billion last year, up nearly 8% from 2023, according to Savills.
In its annual report "Review of Global Capital Markets", the international real estate consultant points out that the upswing extends beyond individual markets and regions and is not limited to specific sectors. The volume of office investment also increased by 7% compared to the previous year.
Rasheed Hassan, Head of Global Cross Border Investment at Savills, comments: "The reluctance to invest in offices globally in 2023 and well into 2024 was largely driven by negative headlines from the US, which reported poor space utilisation. Despite this, many large office markets around the world are showing a shortage of high-quality space and robust rental growth. We are now seeing positive developments in many U.S. labor markets and see that as macroeconomic conditions stabilize, investors will regain more investment in these and broader commercial real estate markets."
In the fourth quarter of 2024, all sectors saw revenue increase of more than 25% compared to the same quarter last year, from $203 billion to $258 billion. Savills interprets this as a sign of strong market momentum for 2025. The average transaction size increased by 10% globally, and large institutions increasingly returned to the market. Portfolio and M&A transactions increased by almost 50% in the fourth quarter of 2024. Geographically, most major markets globally found their way back to growth in 2024, especially Australia with several large transactions and South Korea, supported by extraordinarily positive fundamentals in the office sector.
Oliver Salmon, Director – Global Capital Markets at Savills World Research, adds: "After a challenging few years, the cyclical factors that affected property values and investment activity are starting to ease. We expect the recovery of the real estate capital markets to continue to gain momentum. In some markets, 2025 will be the optimal time to buy in this cycle. However, the environment for raising capital remains challenging. However, market liquidity is supported by a growing number of motivated sellers and the reinvestment of capital by private equity funds, which are accelerating their sales after a delay during the downturn. Therefore, we forecast global investment to grow by 20% annually in the coming years as liquidity returns to markets."
