Research data indicates that global cross-border commercial real estate investment reached $71.8 billion in the first half of 2026, a 56% increase year-on-year and notably higher than the roughly $46 billion recorded during the same period last year.
Among this total, capital flows into Europe amounted to $39.9 billion, while Asian markets attracted $19.3 billion, with the two regions together accounting for more than 82% of global cross-border investment. By investment destination, Europe absorbed approximately 55.6% of global cross-border commercial property investment, maintaining its position as the primary allocation market for international capital, while Asia accounted for roughly 26.9%. Beyond Europe and Asia, other regions collectively received around $12.6 billion in cross-border investment.
Cross-border investment typically refers to property purchases by investors outside their registered market jurisdictions. As such transactions involve exchange rates, financing channels, tax regimes, and asset management capabilities, their growth trajectory serves as a reliable gauge of institutional investors' willingness to allocate capital across global markets. A survey conducted among European investors at the start of the year revealed that 89% of respondents expected property purchasing activity to either increase or remain stable throughout 2026.
London continues to be the most targeted city for cross-border investment in Europe, followed by Madrid, Warsaw, Barcelona, and Milan. Residential property and logistics real estate remain the favored sectors among European investors, while sentiment toward office and retail properties has also improved compared with the prior year.
Asian commercial real estate investment sentiment is recovering, with the region attracting $19.3 billion in cross-border capital during the first half. Early-year surveys showed that net buying intentions among local investors rose from 13% in 2025 to 17%, with more than 57% of respondents planning to increase real estate investment in 2026. For the first time in six years, office properties have become the most preferred commercial real estate category among Asian investors, followed by industrial and logistics facilities, residential property, and data centers. Tokyo has been ranked the most favored cross-border investment destination in Asia for the seventh consecutive year, with Sydney taking second place, while Singapore and Seoul are tied for third.
Improving leasing demand, a reduction in future new supply, and declining financing costs in certain markets are the primary factors supporting investors' increased allocations. Capital remains concentrated on quality assets with high occupancy rates, favorable locations, and compliance with energy efficiency standards. Investors continue to exercise caution regarding properties requiring substantial renovations or those with unclear leasing prospects.
Global real estate transaction activity is also recovering, with direct property investment growing 28% year-on-year in the second quarter. Asia-Pacific investment surged 38%, Europe, the Middle East, and Africa grew 27%, and the Americas advanced 26%. Transaction improvements were especially notable across retail, industrial and logistics, and hospitality assets. Property pricing is stabilizing as buyer and seller expectations converge, facilitating larger deal volumes. Active debt financing markets have also supported institutional investors re-entering the commercial real estate space.
Nevertheless, financing costs could still constrain transaction velocity in the second half of the year. Commercial property valuations remain sensitive to long-term interest rates and debt expenses; should inflationary pressures keep market rates elevated, some leveraged transactions may be postponed. Rising construction and labor costs are also compressing returns on redevelopment projects, further steering capital toward stabilized, cash-flow-generating assets.