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The report indicated that demand from Singapore-based buyers on the lookout for opportunities in mature economies, particularly cities in Western Europe and the US, continued to be strong, with some buyers looking beyond Poland and Ireland.
Singapore emerged as the second-biggest source of Asian outbound capital, after South Korea, with investors from the city-state spending US$5.7 billion (S$7.9 billion) in offshore commercial real estate investments during the first half of 2019.
CBRE’s latest report showed that South Korean investors registered US$6.8 billion (S$ 9.4 billion) worth of overseas transactions in the first six months of 2019, reported The Business Times.
Outbound capital flows from Singapore dropped 37 percent in the first half. It also fell by over 50 percent from the second half of 2018, which could be seasonal since Singapore-based investors show increased activity in the second half of the year – a trend observed by CBRE since 2013.
“While investors from Singapore have been active in overseas investments in 2017 and 2018, the looming global economic uncertainties may have moderated their pace in general,” said CBRE Singapore executive director of capital markets Hugh Menck.
“Nonetheless, Singapore-based buyers became more active within Asia, a region that they are more familiar with, accounting for 43 percent of transaction volume in the region in the first half of the year.”
The report indicated that demand from Singapore-based buyers on the lookout for opportunities in mature economies, particularly cities in Western Europe and the US, continued to be strong, with some buyers looking beyond Poland and Ireland.
“For Singapore-based investors, acquisition strategies focused primarily on structural opportunities such as logistics properties, as well as defensive assets such as offices. There are also buyers who are adding multi-family assets to their portfolios,” said CBRE.
Overall, Asian outbound commercial real estate investment for H1 2019 amounted to US$19 billion (S$26.3 billion). This represents a 25 percent year-on-year decline, weighed down by global economic uncertainties and the rebalancing of portfolios by investors from mainland China.
The company, however, believes that Asian investors could still get alpha returns through a blended, defensive portfolio that combines indirect and direct investments in core properties.
“Participation in funds will be worthwhile for investors who are interested in increasing their exposure to commercial real estate, but perhaps, lack the operational expertise,” said Henry Chin, head of research of APAC/EMEA at CBRE.
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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