SINGAPORE - Singapore was the top Asian outbound real estate investor in 2014, snapping up US$11.9 billion worth of properties across the globe, outspending for the second year in a row buyers from China and Hong Kong, according to a report by CBRE on Monday.
This topped by 26.6 per cent the US$9.4 billion that Singapore investors spent in 2013 on overseas properties.
Asian outbound real estate investment as a whole hit a record for the second year in a row - US$40 billion in 2014, 23 per cent higher than for 2013, the real estate services firm said.
Said Ada Choi, senior director for CBRE Research Asia: "Singapore maintained its position as the number one source of outbound capital, closely followed by China and Hong Kong - with all three markets showing an increase in cross border investment.
"Singaporean investors looked offshore as a result of compressed yields in their home market and a shortage of investible assets, while Chinese outbound growth was in particular driven by the emergence of new sources of real estate capital, particularly insurers as they sought to increase their allocation to real estate under more relaxed rules.
"Alongside more direct investment, more experienced Asian institutional investors from places such as Korea and Japan are increasingly gaining exposure via indirect funds and club deals. Established sources of capital such as these will continue to grow, but the emergence of sources of new capital such as the Chinese and Taiwanese insurance companies will make a significant mark on global real estate markets in the coming years."
5 highlights of CBRE report:
1. Singapore was the top Asian investor in 2013 and again in 2014: US$11.9 billion worth of properties acquired across the world last year, up 26.6 per cent from US$9.4 billion in 2013
2. Total Asian outbound real estate investment hit a record for the second year in a row - US$40 billion in 2014, 23 per cent higher than for 2013.
3. New investor types emerged over the year, in particular, insurance groups from China and Taiwan and Chinese property companies.
4. Investors are looking beyond traditional gateway markets and asset classes.
In 2013, 60 per cent of outbound investment focused on five global investment destinations, but in 2014 this fell to 39 per cent. Notable beneficiaries of this trend in 2014 included Paris in Europe and Los Angeles, San Francisco and Washington in the United States.
Asian cross-border real estate investors also began to diversify in terms of asset classes; investing more in hotels and industrial - though office continued to dominate.
Said Marc Giuffrida, executive director, Global Capital Markets, Asia: "Investors feel that by looking to new markets and asset classes they will be able to secure better yields and face less competition from other investors."
5. Europe, the Middle-east and Africa (EMEA) continued to receive the largest share of Asian investment nut other regions also saw big increases
EMEA saw US$13.7 billion of investments in total, in line with 2013. Other regions saw substantial increases in Asian investments: Americas (up 20 per cent year-on-year), Pacific (33 per cent year-on-year) and Asia intra-regionally (58 per cent year-on-year).
In Asia, Japan was the leading target destination, followed by China.