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The top real estate investment destinations for Singapore investors in 2020 include Beijing, London and Seoul, revealed CBRE.
For the third consecutive year, Singapore emerged as the most active source of Asian outbound capital for real estate, accounting for US$12.1 billion (S$16 billion) worth of deals last year.
The top real estate investment destinations for Singapore investors in 2020 include Beijing, London and Seoul, revealed CBRE.
Asian outbound commercial real estate investment volume fell 37% year-on-year to US$30 billion (S$39.8 billion) in 2020, as COVID-19-related obstacles including travel restrictions and site inspections impeded purchasing activity.
“Singapore investors look to invest overseas because the pool of assets available at home is relatively small. What’s more, when it comes to overseas acquisitions, Singapore investors are generally well regarded as a sophisticated and savvy group who are used to investing offshore, while being prudent as to where they invest in their search for what they conclude will give the best risk-adjusted returns,” said Greg Hyland, Head of Capital Markets for Asia Pacific at CBRE.
Korea emerged as the second-biggest source of outbound funds, accounting for almost 50% of Asian outbound investment stateside mainly due to the lower hedging costs of Korean won against the US dollar.
Mainland China came in third in terms of weight of outbound capital, on the back of several major acquisitions in Australia. While there was a slight rebound in outbound investment from Mainland China, the total figure is still way below historical highs.
CBRE noted that the U.S. was last year’s top destination for outbound capital, attracting US$7 billion (S$9.3 billion) worth of funds. The U.K. came in second, followed by Australia, Mainland China and Germany.
Asian outbound investment to the U.K. remained “largely consistent with 2019 levels as strong liquidity and attractive yield compared to continental European markets largely offset Brexit-related uncertainty”, said CBRE.
“Despite the weaker outbound investment volume in 2020, we are optimistic that real estate investment will pick up over the next 12 months,” said Dr. Henry Chin, Global Head of Investor Thought Leadership and Head of Research, Asia Pacific, CBRE.
In fact, CBRE’s 2021 Asia Pacific Investor Intentions Survey showed that 70% of investors within the region intend to acquire assets overseas this year, “suggesting a mild recovery in Asian outbound investment volume this year”.
“Owing to ongoing travel restrictions, investors’ familiarity with Asia and the region’s anticipated strong economic rebound, the bulk of these acquisitions are expected to be within Asia in markets such as Tokyo, Singapore, Seoul and Mainland China tier I cities. Looking beyond Asia, the U.S. and U.K. are projected to remain among the top destinations for outbound capital, supported by lower hedging costs and positive yield spread, respectively,” said Chin.
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