Investors make a strong push for alternative real estate

Global transaction volumes show most traded asset

November 09, 2021

The global real estate investment market has proven to be resilient with strong levels of liquidity over 2021. Globally, transaction volumes totaled US$292 billion over the third quarter of this year, up 77 percent year-on-year.

Some cross-border investors have been able to navigate international travel restrictions and deploy capital into real estate markets. Cross-border investment activity was up 46 percent year-on-year in the third quarter, but remains 15 percent down on pre-pandemic norms.

The push into real estate alternatives has become more pronounced. Globally, the living sector, accounting for 29 percent of transaction volumes, has replaced offices (27 percent) as the most traded sector in 2021. Logistics has jumped from 10 percent of global transaction volumes in 2015 to 23 percent in 2021.

The real estate alternatives investable universe in Australia is not at the same scale and depth as other mature economies. However, the long-term thematic drivers are comparable, and we believe a strong asset creation cycle will result in alternative real estate becoming larger and more diverse.