Singapore among region's top cross-border investors in real estate
SINGAPORE was the third-highest source of commercial real-estate capital outflow in the Asia-Pacific last year, with a 35 per cent growth in cross-border purchases to US$19.9 billion.
This is based on Knight Frank's Active Capital: The 2018 Report, which lists the sources and destinations of cross-border investments in global commercial real estate.
The figure includes exports to the United States (US$6.6 billion), Australia (US$3.3 billion), and the United Kingdom (US$2.8 billion), which place in the top 20 highest specific market-to-market outflows.
Singapore, along with Hong Kong (US$20.5 billion) and China (with US$31.5 billion), played the biggest parts in making the Asia-Pacific the top source of cross-border real estate capital in the world.
This region reported a total of US$90 billion in cross-border investments in commercial real estate. It was the first time the Asia-Pacific overtook both Europe and North America since Knight Frank first started tracking the markets in 2007.
Europe and North America respectively accounted for US$83.3 billion and US$80.9 billion of cross-border deals in commercial real estate.
Neil Brookes, Asia-Pacific head of capital markets of Knight Frank, said: "A major driver for the increase in outbound capital is the surge in the strength of the domestic markets in the Asia-Pacific, which saw a 36 per cent increase in investment activity in the 12 months to March 2018, with the first quarter of this year setting an all-time record for transaction volumes."
Nicholas Holt, the Asia-Pacific head of research at Knight Frank, said: "While China remains the top capital exporter, Hong Kong and Singapore with 41 per cent and 35 per cent year-on-year growth in volumes in 2017 respectively, were more active, as limited local liquidity and diversification strategies encouraged investors to look overseas."
This re-internationalisation is also affecting other countries globally: Last year, 32 per cent of all transactions by volume involved cross-border purchases, up from 25 per cent between 2009 and 2011, with the UK, the US, and Germany being the most popular investment spots.
This rising growth is expected to continue this year, with the reactivation of mandates from a number of regions with significant investment firepower.
As an example, the re-emergence of Japan as a major purchaser investor could reinvigorate cross-border capital flows if even a tiny additional share of domestic investment finds its way into overseas markets.
Mr Brooke also noted South Korean and Singaporean investors' interest in US commercial real estate debt opportunities, and Europe and the UK's long-leased office assets and logistics sector.
Adapted from TheBusinessTimes, Jun 26, 2018