S'pore tops Asia in global real-estate deals
SINGAPORE has overtaken China as the top source of Asian capital for investments in global real estate this year, even as Asian investors plough in more capital, going by transactions valued at US$10 million (S$12.5 million) and above.
According to global real-estate consultancy CBRE, Asian outbound investments surged 40 per cent year-on-year to US$16.2 billion in the first half of this year.
Among the most active sources of Asian capital, Singapore was No. 1 and accounted for 29 per cent, followed by Hong Kong at 25 per cent, China at 23 per cent and Malaysia at 5 per cent. Last year, Singapore was in second place behind China.
Singapore's outbound investments in real estate have been driven by a surge in overseas ventures by developers, as yields in the domestic market have been compressed following a slew of cooling measures.
But the Republic has dropped out of the top-five destinations for Asian real-estate dollars this year, after being in fourth place last year.
"Asian outbound investment continues to show strength and we confidently expect full-year 2014 investments to surpass (those of) 2013, which was already a record year," said Ada Choi, senior director at CBRE Research Asia.
"Hong Kong also rose to second place for the first time, with domestic cooling measures in particular driving Hong Kong investors to look further afield," she added.
A majority 63 per cent of Asian dollars went into office assets in the first half of this year, followed by hotels (25 per cent) and retail assets (7 per cent), while the remainder went into industrial (3 per cent) and mixed-use (2 per cent). CBRE's data excludes development sites and residential transactions.
The top-five real-estate destinations for Asian investors were London, New York, Los Angeles, Sydney and Beijing. London's share of Asian investments dropped to 25 per cent from 41 per cent, while New York's share went up to 15 per cent from 9 per cent.
"Asian investors continue to show a strong preference for trophy assets in global gateway cities," said Marc Giuffrida, CBRE executive director for global capital markets in Asia.
He noted that Asian investors are further diversifying their market exposure - which explains why the top-five cities account for a smaller 58 per cent of total Asian cross-border investments this year, down from 66 per cent last year.
Chinese developers, including state-owned Greenland Group and China Vanke, have been snapping up assets in the United States, Australia and London, prompted by a consolidation in their home market.
In March, Greenland acquired a historic site in Canary Wharf, London, for £600 million (S$1.2 billion) to build a mixed development, after its purchase of Wandsworth's Ram brewery site earlier this year to build a tower comprising new homes and retail space.
More Singapore developers and property companies are also gunning for acquisition targets overseas.
Among them, Mapletree Investments snapped up a property in Silicon Valley last month for US$70 million, which it will retrofit and rebrand as an Oakwood serviced residence.
In March, Ho Bee Land spent £171 million on a prime Grade-A office property in London.
THE BUSINESS TIMES