The global real estate investment market was up almost 5% in 2018 but foreign exchange had an adverse effect on the property market during the period.

According to the annual MSCI Real Estate Market Size Report 2018, the size of the global real estate investment market increased from $8.5trn (€7.6trn) in 2017 to $8.9trn in 2018.

The market was $7.4trn in 2016.

The report – which estimates the size of the professionally managed real estate investment markets across 32 countries – stated that currency movements effectively decreased the size of the global real estate investment market by

approximately -2.6% in US dollars terms, unlike 2017’s positive impact of +5.3%.

According to the report, the US and Japan maintained their first and second market size positions at $3,146bn and $831bn respectively.

The UK real estate market contracted by $6.2bn to reach $714bn in 2018 but maintained its third market position.

China added $57.6bn to its size to reach $540bn, enabling it to replaced Germany as the fourth largest market in 2018.

Germany added $21.1bn to reach $535bn during the period, the MSCI report revealed.

Will Robson, global head of real estate solutions research at MSCI, said: “Our annual market size report is designed to give investors transparency and clarity into the workings of the global real estate market and provide the insight they need to make informed investment decisions.

“This year’s report has highlighted the significant impact currency fluctuations had on global real estate portfolios, as well as the interesting shifts at play in the UK, US and Chinese markets.”

Jay McNamara, head of real estate at MSCI, said: “It’s encouraging to see MSCI’s index coverage has increased in the past year, a signal that the global real estate market is on the right track to become more transparent, something which is undoubtedly positive for investors and the industry as a whole.”