Investment in commercial real estate around the world will be flat in 2019.

Because of Brexit and trade policy uncertainty, there are fewer ultra-large deals. However, worldwide commercial real estate investment volumes decreased by 2% year over year, according to a new CBRE research. This includes entity-level transactions as well as quarterly increases. home

Year-to-date volume is down 5% from last year's comparable period. APAC's Q3 growth was strong, up 49 percent year-over-year, helping to balance the sluggishness of H1 and push year-to-date growth to 6 percent. The Americas and EMEA had a dismal third quarter because of political unrest, low yields, and recession fears.

Research Head for the Americas at CBRE, Richard Barkham, says, "Global commercial real estate investment, according to CBRE, will dip by a single digit percentage point from last year's record high. However, uncertainties about Brexit and various trade battles have not resulted in a severe recession due to low interest rates, tight labor markets, or cautious consumers. The trend of fewer mega-deals will certainly continue until 2020 unless the market sentiment changes."

The following are a few noteworthy findings in the document:

Including entity-level transactions, worldwide commercial real estate (CRE) investment amounted to US$260 billion in Q3 2019, an increase of 7% from the previous quarter but a decrease of 2% from Q3 2018.

Seasonally adjusted, third-quarter investment matched the second quarter, but year-over-year it was down 8%.

When seasonality, entity-level sales, and Blackstone's acquisition of GLP's US logistics portfolio are taken into account, U.S. investment volume is somewhat lower year over year in Q3, but is slightly higher year to date.

While Brexit uncertainty affected investor optimism in EMEA, APAC saw an uptick in investment activity that was heartening. Nevertheless, EMEA investment volume increased after a poor start to the year, with France, Sweden, and Germany leading the way.

Recent interest rate reduction have expanded yield gaps, rekindling investor enthusiasm.

Paris has eclipsed London as the most popular international financial center for the first time in history. Cross-border investment plummeted to its lowest level in six years in the third quarter.

Seasonal adjustment paints a less rosy picture because third quarters have generally been strong. Compared to the previous quarter, seasonally adjusted worldwide volume was steady in Q3 2019, but it was down 8% year on year. Fewer ultra-large deals worsened the year-over-year reductions as fewer high-quality assets were available for sale, limiting capital deployment.

Adapted to the changing of the seasons There has been a 17 percent year-on-year drop in the Americas' investment volume and a 3 percent drop overall, due in large part to decreased volumes in Canada and the US. Seasonally adjusted, investment volume in the United States is down 7 percent from last year and 1 percent from this point last year, making up more over half of global operating. With the exception of one transaction, the US would have witnessed a 2% year-over-year decline and a 3% year-to-date rise save for the $18.7 billion purchase of GLP's US industrial portfolio by Blackstone (seasonally adjusted). Reduced entity-level transactions accounted for nearly all of the drop in US investment volume in Q3 2019. Excluding entity-level transactions, US investment volume climbed 14 percent annually after seasonal adjustment and 8 percent year to date.

Cross-border investment plummeted to its lowest level in six years in the third quarter. There were fewer ultra-large transactions and fewer large-ticket retail REIT acquisitions, which contributed to this. While retail REIT values partially recovered and became more expensive, investors in Asia who were key cross-border players switched to more local and intra-regional investing.

Cross-border investment in the United States has plummeted by 57% year-to-date compared to the same period last year, a particularly notable slump (Figure 3). Inbound investment from Singapore, Japan, China, and Hong Kong fell by 15% while entity-level transactions fell by 75%. The drop was due to the substantial decline in transactions.

EMEA's investment volume fell by 6 percent year over year in the third quarter (seasonally adjusted). Investment activity declined in the UK (-28%) and Spain (-44%) but expanded considerably in France (44%) and Sweden (44%) (307 percent). Paris has now eclipsed London as the most popular international financial center for the first time in history. Germany's investment surged in the third quarter, but has since leveled off compared to the same period last year. To far, the investment volume in EMEA has declined by 14%, with the United Kingdom and Germany both accounting for 6% of that total. Because there was a dearth of high-quality products and mega-deals in Europe's top five markets, investment fell. This was also true in the Americas.

Office and residential properties remained EMEA's most enticing investment opportunities. Investors were primarily concerned with increasing their returns by capitalizing on rising rental activity and rent, although the residential sector was hampered by uncertainty surrounding EU rent control rules. Due to Brexit uncertainty, investors in the UK have been cautious despite ample liquidity and respectable yields. We're still optimistic about a smooth Brexit helping to reenergize the economy, so we're keeping our fingers crossed.

Over the course of the year, APAC saw a 49 percent rise in investment, or a 42 percent increase after seasonal adjustments. As a result of the escalating US-China trade conflict, investment levels in 2018 recorded their lowest Q3 level since 2013, contributing to the increase. As seen by the strong annual growth rate of 68 percent recorded in China during the third quarter (seasonally adjusted). In Australia (42%), Japan (31%), and Singapore (62%) lower interest rates have strengthened investor sentiment, and this has resulted in more competitive yield spreads and a rise in large-ticket deals. Australian office investment has been the highest since 2005. Hong Kong's investment volume decreased by -9% in the wake of political unrest there. Compared to the same period the preceding year, APAC's total revenue of US$92 billion was up 6% (seasonally adjusted).

Asia's relatively strong returns and potential for income development remain attractive to global investors. In the first three quarters of 2018, only 8% of Asia's investment came from outside the region. This has risen to 13% in the first three quarters of 2019, owing largely to capital inflows from the United States, Canada, and Germany.