The Business Times, 25 Mar 2022, Fri 5:50 am
By Nisha Ramchandani
CAPITAL from Singapore accounted for the majority of Asia’s US$54.6 billion in outbound commercial real estate investment in 2021, a CBRE report says.
Outbound flows from Asia rebounded from 2020, surging 69 per cent year on year to that amount, exceeding pre-pandemic volumes.
Singaporean investors splashed out US$32 billion overseas – up 164 per cent year on year – across 6 transactions, largely in the United States and in logistics assets.
For instance, CapitaLand announced in April last year it was acquiring a hyperscale data centre campus in Shanghai for 3.66 billion renminbi (S$780 million).
Investors from Hong Kong were the second most active source of capital last year, at US$6.7 billion, investing 60 per cent more than the year before, as they homed in on retail and office assets in China.
Bottom of Form
“Investors from Singapore and Hong Kong were the most active due to the size of their markets and available liquidity,” said Greg Hyland, CBRE’s head of capital markets (Asia-Pacific). “The United States was the preferred international market for Asian investors due to attractive US dollar hedging costs and its robust economy, relative to Asia as business travel normalises.”
Asian investors were largely focused on the Asia-Pacific as they relied on their networks and expertise to sniff out and transact deals. Markets such as Australia, China, the United Kingdom and Japan attracted investor attention, while the US drew the most, at US$21.6 billion.
By asset class, industrial and logistics assets saw US$24 billion in capital from the region last year, pipping office investment for the first time.
However, this also resulted in thinner global industrial yields, which shrank to 3.7 per cent in the fourth quarter of 2021.
Dr Henry Chin, global head of investor thought leadership and head of research (Asia-Pacific) for CBRE, said: “The majority of Asian investors are expected to deploy more capital this year with a particular focus on North America and regional gateway markets, such as Tokyo, Shanghai and Sydney.”
He expects cross-border investments within the Asia-Pacific to grow by up to 10 per cent to US$39 billion in 2022.Within the Asia-Pacific, North American real estate funds remained the most active cross border investors in the region. Asia-Pacific yields will “remain stable and attractive”, the report highlighted.
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