Global living investment rises across regions

Despite challenging geopolitical and economic conditions, the long-term structural positive fundamentals for living assets continue to drive growth in investment. Fourth quarter activity was robust across the U.S., EMEA and Asia Pacific, pushing each region to higher overall full year volumes versus 2023. Transaction volumes finished the year up 11% in the U.S., 14% in EMEA and 5% in Asia Pacific, with further investment growth across all three regions anticipated in 2025.

Despite rising Treasury yields contributing to a choppy fourth quarter in the U.S., some US$31 billion in transactions closed, raising the full-year total to US$127 billion (+11% from 2023). Near-record dry powder continues to target living assets, setting the stage for increased transaction activity. European living investment reached its highest quarterly level since 2022 in Q4; direct transaction volumes of €15 billion in the quarter reflected growth of 36% year-over-year, while the annual total of €44 billion was up 14% from 2023. In Asia Pacific, the end of 2024 was characterized by a flurry of smaller deals across the region with volumes of US$2.4 billion in the final quarter, which pushed 2024’s total to just above US$7 billion, a 5% increase on 2023.

Future trends: Green shoots point to continued strengthening in living sector investment

Short-term: Following a positive uptick in activity in the final quarter of 2024, living investment is expected to continue to increase throughout 2025 despite geopolitical turbulence and a more gradual central bank interest rate cutting cycle. Fundamentals remain strong in Europe and are likely to improve in the U.S. as new supply decreases further. With slowing new construction and robust investor sentiment larger platform deals are likely to become a more common feature of the market as we move through the year.

Long-term: Living investment activity will grow particularly strongly in established real estate markets where institutionally-owned income-driven housing models are still classified as emerging sectors. This includes the likes of Australia, Japan, the UK and France. Growth will also continue in the most established living markets such as the U.S., Canada and Germany, with investors increasingly targeting the full spectrum of living asset types and searching for operational and platform synergies.