Global Capital Flows Remain Subdued, EMEA Leads in Q1 2025
ECONOMY & POLICY

Global Capital Flows Remain Subdued, EMEA Leads in Q1 2025

The Bharat InvITs Association’s industry update for Q1 2025 shows subdued global capital flows, with investment volumes remaining at the lower end of the five-year range despite a late 2024 recovery. According to data from Colliers and MSCI Real Capital Analytics, activity in North America declined slightly, while EMEA maintained steady levels and emerged as the top region for investment in standing assets.

The EMEA region now hosts seven of the top ten cross-border capital destinations for standing assets, pushing the United States’ share of global activity below 15 per cent. Meanwhile, investor interest in Asia Pacific (APAC) is rising, particularly for land and development opportunities, where seven of the top ten destinations are in the region. China remains dominant, capturing 80 per cent of cross-border activity in land and development.

Sector-wise, multifamily investments have overtaken industrial and logistics as the leading global investment category on a two-year rolling basis, with US$201 billion committed globally. Industrial assets, while still buoyant, have seen stable performance across all regions despite trade-related uncertainties. Offices, retail, and hospitality followed, with senior housing trailing.

The United States continues to be the largest source of global capital despite a decline in cross-border investment share from over 32 per cent in Q1 2024 to 28 per cent in Q1 2025. The UK remains a strong contributor, while Germany, Norway, and Japan also figure prominently in outbound capital rankings.

Global commercial real estate (CRE) fundraising surged in Q1 2025, raising US$58 billion—already 44 per cent of 2024’s total. Notably, 60 per cent of funds exceeded their targets. Opportunistic strategies led with 47 per cent of the capital raised, followed by debt strategies at 33 per cent. Blackstone accounted for nearly one-third of the quarter’s fundraising volume.

Looking ahead, economic growth projections have moderated since late 2024 but remain positive. Geopolitical developments, particularly the return of President Trump and new trade barriers, have added uncertainty. Nonetheless, inflation and interest rates have begun to stabilise, especially in the Eurozone, where further rate cuts are anticipated. APAC shows a mixed outlook, with Japan cautiously raising rates, while other regional economies have started easing.

Favourable yield spreads across APAC, EMEA, and North America are likely to support continued transactional activity, particularly with private capital remaining actively engaged.

This evolving capital landscape suggests a cautious yet resilient investment environment, with regional dynamics, sectoral shifts, and regulatory policy continuing to shape global investment flows in 2025.

The Bharat InvITs Association’s industry update for Q1 2025 shows subdued global capital flows, with investment volumes remaining at the lower end of the five-year range despite a late 2024 recovery. According to data from Colliers and MSCI Real Capital Analytics, activity in North America declined slightly, while EMEA maintained steady levels and emerged as the top region for investment in standing assets.The EMEA region now hosts seven of the top ten cross-border capital destinations for standing assets, pushing the United States’ share of global activity below 15 per cent. Meanwhile, investor interest in Asia Pacific (APAC) is rising, particularly for land and development opportunities, where seven of the top ten destinations are in the region. China remains dominant, capturing 80 per cent of cross-border activity in land and development.Sector-wise, multifamily investments have overtaken industrial and logistics as the leading global investment category on a two-year rolling basis, with US$201 billion committed globally. Industrial assets, while still buoyant, have seen stable performance across all regions despite trade-related uncertainties. Offices, retail, and hospitality followed, with senior housing trailing.The United States continues to be the largest source of global capital despite a decline in cross-border investment share from over 32 per cent in Q1 2024 to 28 per cent in Q1 2025. The UK remains a strong contributor, while Germany, Norway, and Japan also figure prominently in outbound capital rankings.Global commercial real estate (CRE) fundraising surged in Q1 2025, raising US$58 billion—already 44 per cent of 2024’s total. Notably, 60 per cent of funds exceeded their targets. Opportunistic strategies led with 47 per cent of the capital raised, followed by debt strategies at 33 per cent. Blackstone accounted for nearly one-third of the quarter’s fundraising volume.Looking ahead, economic growth projections have moderated since late 2024 but remain positive. Geopolitical developments, particularly the return of President Trump and new trade barriers, have added uncertainty. Nonetheless, inflation and interest rates have begun to stabilise, especially in the Eurozone, where further rate cuts are anticipated. APAC shows a mixed outlook, with Japan cautiously raising rates, while other regional economies have started easing.Favourable yield spreads across APAC, EMEA, and North America are likely to support continued transactional activity, particularly with private capital remaining actively engaged.This evolving capital landscape suggests a cautious yet resilient investment environment, with regional dynamics, sectoral shifts, and regulatory policy continuing to shape global investment flows in 2025.

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