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The city-state beat Hong Kong despite seeing a 37 percent drop in cross border capital outflow.
Singapore led Asia-Pacific cross-border commercial real estate investments, as cross-border capital outflows from the city-state rose 23 percent year-on-year in the 12 months to Q1 2019 to US$21.8 billion (S$29.8 billion), reported Singapore Business Review citing Knight Frank.
The city-state surpassed Hong Kong, which clinched the second spot even as cross border capital outflow fell 37 percent to US$11.4 billion (S$15.5 billion).
Singapore was also ranked as one of the ten most likely sources of cross-border capital outflows, alongside Germany, Taiwan, Norway, Qatar, US, Switzerland, Japan, UAE and Luxembourg.
Singapore investors were found to have reduced their exposure to retail assets as they channelled capital into alternative asset classes within the Western markets.
Institutional investors from Singapore injected money into purpose-built student accommodation (PBSA), which was what Singapore Press Holdings (SPH) did when it added assets worth £133.7 million (S$229 million) into its UK student property portfolio.
In fact, RCA data compiled by Knight Frank showed that outbound investment from Asia-Pacific markets to UK student property increased 47 percent over the last five years.
“The majority of investors based in Asia-Pacific who are looking to invest in PBSA are heavily weighted in traditional asset classes in their home region and are now looking to divest to other locations and sectors. To gain an immediate platform, large scale portfolios are at the top of the requirement list, hence the big jump in cross-border investment in recent years,” said Emily Fell, director for capital markets at Knight Frank Asia Pacific.
In terms of inbound capital, Singapore placed fifth in APAC after getting US$3.9 billion (S$5.3 billion) worth of investments in the 12 months leading to Q1 2019. This marks a 49 percent increase from US$2.6 billion (S$3.5 billion) over the same period last year.
“China’s maturing market has been a target, not only for Singaporean investors but for US private equity and Hong Kong-based capital. Whilst Tier-1 markets continue to attract the lion’s share of capital, some investors are exploring dynamic Tier-2 markets,” said Neil Brookes, Knight Frank’s Asia-Pacific head of capital markets.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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