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Singaporean investors led Asian outbound investment activity in the first half of 2018 as capital from the city-state accounted for 36 percent of the region’s total outbound investment of US$25.3 billion, according to recent data compiled by CBRE.
This comes as Chinese outbound real estate investment slowed down.
With London continuing as the preferred destination by Asian investors, CBRE noted that substantial funds coming from Hong Kong and Singapore were injected into this European city to capitalise on the more favourable yields and longer rental periods offered by commercial properties that could not be attained domestically.
“Singaporean investors favoured Europe as a location for portfolio diversification, investing US$3.4 billion into the region in the first half of 2018,” said Yvonne Siew, CBRE’s executive director of global capital markets, Asia Pacific.
They were also active in the US logistics sector, building a US$2.27 billion portfolio during the same period, she said.
Singaporean investors continue to look for opportunities within the region and beyond, especially in the office and logistics sectors. “For many of them, this is a long-term growth strategy as they seek to diversify their portfolios and enhance their yields given limited opportunities and compressed yields in the domestic market,” she added.
Tom Moffat, CBRE’s capital markets head for Asia, expects Asian investors to continue to be active overseas, despite the slowdown in Chinese outbound activity.
“Asia Pacific investors are becoming increasingly recognized players and continue to expand portfolios strategically. The slowing of Chinese investment has prompted the emergence of more diverse capital sources, which illustrates the depth of liquidity and appetite for offshore deployment,” he said.
Chinese investors decelerated overseas assets acquisition in H1 2018 and began disposals, particularly in Europe and the US, to improve balance sheets. In fact, CBRE expects the disposals to continue for some Chinese investors under financial strain.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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