Logistics & Industrial Capital Markets 2024 Outlook Report

How did global capital markets perform in 2023?

2023 was a challenging year for capital markets globally with dealmaking paralysed by the standoff between potential buyers and sellers on pricing. The decline in asset values that began in 2022 proliferated further in 2023, and illiquidity occurred in many regions and markets. Globally, investment volumes across the core commercial real estate sectors (L&I, Office,

Retail and Hotels) fell 40% in 2023 when compared to 2022 levels, albeit there were large variances by region. Liquidity was greatest in the APAC region, with a 27% fall recorded, while the Americas and Europe, the Middle East and Africa (EMEA) saw falls of 43% and 45% respectively.

Figure 16. Global Commercial Real Estate Transaction by Region ($AUD – Rolling Annual - $Bn)

$1,400

$1,200

$1,000

$800

$600

$400

$200

$0

Mar-17

Mar-21

Mar-14

Mar-15

Sep-15

Mar-16

Mar-19

Sep-17

Mar-18

Sep-18

Sep-21

Sep-14

Sep-16

Sep-19

Mar-22

Sep-22

Mar-23

Sep-23

Mar-20

Sep-20

EMEA Americas

APAC

Source: MSCI, Cushman & Wakefield Includes L&I, Office, Retail and Hotel sectors

Looking at the L&I sector globally, a similar trend played out, with APAC proving to be more resilient with a 26% fall in transaction volumes compared to 2022, while EMEA was the worst hit with a 44% fall. In the Americas, L&I transaction volumes fell by 38% compared to 2022 volumes. However, context matters and overlaying 2023 L&I investment volumes against pre-COVID average annual volumes shows that with the exception of EMEA, both investment volumes in the Americas and APAC regions in 2023 are in excess of 50% above their pre-COVID average (2010-2019 average).

The most interesting trend to emerge in recent years has been the share of L&I transactions in global capital markets. Historically, the L&I sector accounted for an average of 16% of global commercial investment volumes across the L&I, Office, Retail and Hotel sectors; however, structural tailwinds in recent years have underpinned a capital allocation shift and L&I has accounted for just over one-third of all global transactions by value since the beginning of 2020.

17 | CUSHMAN & WAKEFIELD | LOGISTICS & INDUSTRIAL