INTRODUCTION Contributed by: John Sullivan and Matt Alshouse, DLA Piper LLP
II) Transactional volume increased across markets By and large, investors got back to it in 2024. JLL reported that global investment volume in Q4 of 2024 was up by 37% year-over-year, and full-year activity reached USD704 billion, up almost USD90 billion from 2023. Asian commercial property transactions last year were up by almost a quarter from 2023, to USD131 billion. As importantly, this increase in activity occurred across asset types, and across most markets. Office sector investment was strong, led by trades of multiple larger buildings in South Korea. Despite years of worry about the long-term prospects of retail property, vol - ume was up more than a quarter in Asia in 2024, and Australian logistics properties were also a leading source of deals. Foreign investment in the Asian property markets was robust again, as well: cross-border investment volume in Asian reached USD23.8 billion in 2024, nearly doubling what was seen the prior year. In Europe, a slow recovery has begun, focused primarily on the UK and southern markets with France and Germany lagging. In those latter two markets, according to Savills, investment volume in 2024 was still well under 50% of where it was in 2019, while investment in the UK was closer to 90% of pre-COVID figures. The consensus is that investors and lenders found the bottom of the market, particularly in London, much faster than in the continental markets. In the United States, loan activity increased, leading to some stability returning to markets. CBRE’s lending momentum index was up 37% in the fourth quarter year-over-year, and enter - ing 2025 was at levels not seen since late 2022. This was largely driven by traditional bank lend - ers and life insurance companies re-emerging
and taking away some of the market share they had given up to alternative lenders in the prior few years. As a result of lending costs settling into relative stasis compared to the prior several years, cap rates fluctuated very little, as well, holding at 7% all year, indicating that both sellers and buyers were aligned on pricing fundamen - tals for the first time since 2019. III) Geographic segmentation in asset classes The recent trend of disparate sub-market trends continued across global markets in 2024. In Europe, for instance, logistics was the darling last year, with Cushman & Wakefield reporting price increases across 11 prime European mar - kets in logistics properties in 2024. Office leas - ing prices also increased throughout the region, leading to positive pricing changes. A Savills investor sentiment survey from early this year identified big box logistics and urban logistics as the top two sectors for intended property investments in 2025, ahead of office, multifamily, hospitality, retail and every other asset class, an extraordinary finding. In North America, data centres continue to lead the way, attracting an extraordinary amount of capital. From 2020 through 2022, the pre-leasing rate of under construction data centres in the United States hovered around 50%, meaning most development was on spec. In 2023 and 2024, however, about 80% of under construc - tion data centre space had already been leased. Demand for this type of asset is only expected to grow, with the most important headwind to developers and investors being whether (and where) power supply and infrastructure can keep up. The United States is also seeing an increased focus on medical outpatient build - ings (MOBs), both new construction and trades. Before the pandemic, vacancy rates in this sec - tor were nearly identical to those in the office
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