S'pore is 2nd-biggest Asian investor in global real estate

It places behind China, the region's top spender, for the first half of the year, says consultancy CBRE

Singapore was the second-biggest Asian investor in offshore real estate in the first half, according to consultancy CBRE.

Institutional investors, property and private equity firms here ploughed US$6.8 billion (S$9.2 billion) into global real estate in the six months to June 30, up 20 per cent from the US$5.6 billion invested in the same period a year earlier.

China was the region's top spender, but investors face a roadblock with new capital controls.

They spent US$25.6 billion overseas in the first six months, more than double the US$10.1 billion recorded in the same period last year.

Singapore capital targeted the United States with investment of US$2.4 billion in the first half, China attracted US$1.2 billion and Australia, US$635 million.

Ms Yvonne Siew, CBRE's executive director, global capital markets, the Asia-Pacific, said: "Singapore investors are poised to become major beneficiaries of heightened China capital controls.

"(They) have shown clear signs that they are both capitalised and confident enough to pursue outbound targets to... offset a competitive domestic landscape."

China issued new capital controls last month that focus on offshore real estate investments.

But this regulatory move may not affect China's medium- to longer-term appetite for outbound investment, CBRE said.

"Our data shows that China remained the largest source of cross-border commercial real estate investment capital (both new and capital already circulating offshore) from Asia in first half of 2017," said Mr Robert Fong, director of research, CBRE Asia.

Chinese sovereign wealth funds were the nation's largest single outbound investor class in the first half although its property companies and conglomerates were also big buyers.

Overall, outbound investment by Asian countries into offshore real estate rose markedly in the first half.

About US$45.2 billion was directly invested in property in that period, said CBRE, a 98.4 per cent rise on the first half of last year, with offices the most attractive commercial real estate sector. That segment attracted 44 per cent of the total outlay while logistics accounted for 34 per cent.

The investment of choice was mostly big-ticket deals with 74 per cent of committed investments deployed into transactions worth at least US$250 million.

The proportion was 56 per cent last year.

Asian investors ploughed US$21.9 billion into Europe, the Middle East, Africa and the Americas, mostly into office and logistics assets.

A version of this article appeared in the print edition of The Straits Times on September 01, 2017, with the headline 'S'pore is 2nd-biggest Asian investor in global real estate'. Subscribe