The U.S. commercial real estate market saw slight growth in cross-border investment in the first quarter, with Canada leading the pack, followed by China, Singapore, Germany and the Netherlands, according to Real Capital Analytics' latest "U.S. Cross-Border Investment Compendium" report.
Over the past four quarters, Canadian investors have spent $20.30 billion on 665 properties and Chinese backers have spent $8.93 billion on 765 properties, representing 32.5% and 14.3%, respectively, of the total U.S. deal volume for the period. Property acquisitions in the U.S. by Singapore-, Germany- and Netherlands-based investors totaled $7.71 billion, $5.13 billion and $3.54 billion, respectively, during the period.
U.S. property acquisitions by Chinese investors were higher than expected in the first quarter, despite capital outflow restrictions in that country, due in part to a Chinese joint venture's buyout of Global Logistic Properties Ltd. in January, with the portion attributed to the U.S. amounting to $4.1 billion.
By region, Asia made the most investments in the U.S. commercial property market during the first quarter with $6.2 billion in deal volume, followed by Canada with $3.8 billion and Europe with $2.5 billion. Over the past 12 months, deal volume in Asia, Canada and Europe came to $19.7 billion, $15.3 billion and $14.6 billion, respectively.
The industrial property sector experienced the fastest growth in cross-border investment, rising 97%, over the 12-month period through the first quarter. However, the office sector was still the top target for cross-border buyers, followed by the apartment sector, with just under $250 million of acquisition volume separating the two segments.
Manhattan, N.Y., remained the lead market for cross-border capital in the U.S., with more than $8 billion in deal volume over the last 12 months. However, markets such as Houston; Los Angeles; and Washington, D.C., slowly gained steam, with roughly $3 billion each in deal volume during the period.
