Strength in transactions, but sentiment shifts at quarter-end

Direct transaction activity totalled US$185 billion in the first quarter of 2025, rising 34% year-over-year. Several factors coalesced to drive continued growth in activity, including liquid debt markets, increased institutional bidding, a gradual uptick in transactions of scale, and a year-over-year rise in cross-border transactions. Transaction volumes in the Americas in the first quarter reached US$93 billion, up 37% year-over-year. EMEA transaction volumes totalled US$55 billion, marking a 41% increase. In Asia Pacific, transaction volumes rose to US$36 billion, 20% higher.

Cross-border investment increased by 57% year-over-year in the first quarter. This marks the highest first quarter level since 2022, evidencing how the continued improvement in capital markets dynamics during much of the quarter led to additional normalization of cross-border activity, only to face increased variability at the start of the second quarter.

Across the sectors, investors are focusing on asset quality, tenant credit and sectors in the path of secular growth. Industrial and logistics, living and selected alternatives remain the most sought-after. The share of capital invested in the retail sector marked a slight increase, representing a heightened share compared to the past five years, but transactions of scale are still below potential. Bifurcation across and within sectors persists, most notably within the office sector in the U.S., although office transactions have improved to start the year.