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Asian outbound real estate investment moderated in 2018, with Singapore-based investors being the most active offshore real estate investors, revealed a CBRE report.
Total outbound investment by Asian investors dropped 36 percent year-on-year to US$53.8 billion in 2018, of which 40 percent (or US$21.6 billion) was contributed by Singapore investors.
“Singapore is the largest source of Asian capital in global real estate investments in 2018. Driven by limited opportunities and compressed yields in the domestic market, Singapore investors will continue to seek enhanced yields offshore to diversify their portfolios and achieve more sustainable growth,” said Yvonne Siew, executive director of global capital markets, Asia Pacific at CBRE.
“We expect the export of capital to continue in 2019, in view of the modest outlook in the domestic market.”
Meanwhile, offshore real estate investment by Chinese investors declined significantly to US$7.5 billion in 2018 from US$35.4 billion in 2017.
This comes as Chinese investors rebalance their real estate portfolios, “transitioning into net sellers of real estate to strengthen balance sheets and recycle capital for deployment into future outbound investments”, noted CBRE.
CBRE Asia Pacific associate director of research Leo Chung said the pullback from China’s investors was “not entirely unexpected but encouragingly created opportunities for new strategic investors to amplify offshore investment activities”.
The report revealed that the EMEA continued to be the leading destination for Asian outbound capital last year, attracting US$21.5 billion. Intra-Asian investment stood at US$17 billion, while investment to the Americas and Pacific was at US$11.6 billion and US$3.7 billion, respectively.
London also remained the top destination for Asian capital, due to strong fundamentals as well as its established standing as “preferred metropolitan area for first time buyers to invest”.
Investors from Singapore, Korea and Hong Kong emerged as the major buyers, accounting for more than 85 percent of the investment activities.
CBRE noted that Asian outbound capital deployed to London increased to 18 percent last year from 13 percent in 2017.
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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