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Singapore emerged as the largest Asian investor in overseas real estate investments, spending US$11.9 billion (S$16.15 billion) in these assets last year from US$9.4 billion (S$12.76 billion) in 2013, a CBRE report revealed.
According to CBRE, the city-state maintained its position as the top source of outbound capital in the region, followed by China with US$10.1 billion (S$13.71 billion) and Hong Kong at US$6.3 billion (S$8.55 billion). Malaysia and Taiwan trails behind with US$1.7 billion (S$2.31 billion) and US$0.2 billion (S$0.27 billion) respectively.
“Singaporean investors looked offshore as a result of compressed yields in their home market and a shortage of investible assets, while Chinese outbound growth was in particular driven by the emergence of new sources of real estate capital, particularly insurers as they sought to increase their allocation to real estate under more relaxed rules,” said Ada Choi, Senior Director at CBRE Research Asia.
“We also saw Chinese property developers increasingly active in international markets. Alongside more direct investment, more experienced Asian institutional investors from places such as Korea and Japan are increasingly gaining exposure via indirect funds and club deals. Established sources of capital such as these will continue to grow, but the emergence of sources of new capital such as the Chinese and Taiwanese insurance companies will make a significant mark on global real estate markets in the coming years.”
In total, Asian outbound property investments increased by 23 percent to US$40 billion (S$54.29 billion) in 2014 versus the previous year.
By destination, Europe, the Middle East and Africa (EMEA) received the biggest share of capital as Asian investors pumped in US$13.7 billion (S$18.6 billion) into the region last year. Asia received US$12 billion (S$16.29 billion), while Americas and Pacific received US$8.9 billion (S$12.08 billion) and US$5.2 billion (S$7.06 billion) respectively.
Source: CBRE
CBRE data shows that Asians preferred to invest in London, which clinched 17 percent of the total capital. Tokyo (9 percent), Sydney (5 percent), Shanghai (4 percent) and New York (4 percent) complete the top five investment cities.
By asset type, 54 percent of the overall investment went to office properties, 16 percent to hotels and 11 percent to retail assets. The rest went to industrial real estate (7 percent), residential properties (5 percent) and mixed assets (5 percent).
Image: London skyline
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg.
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