SINGAPORE – Singapore was the main source of investment capital from the Asia-Pacific flowing into North America in the first quarter, according to a report by Knight Frank on Wednesday.
The property consultancy firm noted that US$12.5 billion (S$16.7 billion) from here – largely in the form of mergers and acquisition deals by sovereign wealth fund GIC – was invested in the United States and Canada, which accounted for 90 per cent of the total Asia-Pacific capital inflow.
Singapore invested US$8.6 billion in the US and US$3.9 billion in Canada.
Among the notable deals involving GIC was the purchase of commercial real estate investment trust Store Capital Corp together with private equity firm Oak Street, a division of Blue Owl Capital, for US$8.5 billion.
Ms Christine Li, head of research for the Asia-Pacific at Knight Frank, said: “In times of crisis, US assets are often seen as a safe haven, given the currency stability.
“We have also seen an increased interest in retail and industrial assets due to repricing opportunities in a rising rate environment while there is limited competition. As the Federal Reserve’s rate hike cycle approaches its conclusion, we anticipate further activity in the latter half of 2023.”
Japan was the next largest investor from the region. Japanese investors pumped US$1.1 billion into the United States in the first quarter – the highest amount since the first quarter of 2017 – but made no investments into Canada.
Asian sovereign wealth funds dominated outbound investment from the Asia-Pacific, with 45 per cent of the investments in the retail sector, 40 per cent in industrial and 13 per cent in office space.
Investment activity within Asia-Pacific plummeted 53.6 per cent in the first quarter over the same period in 2022, hitting the lowest point since the fourth quarter of 2011.
Singapore bucked the regional decline and was the only market to record higher transaction volume, a total of US$4.3 billion. A big chunk of that came from the sale of Mercatus Co-operative’s retail portfolio, which took longer than expected to complete due to rising interest rates and choppy equity markets.
Mr Neil Brookes, global head of capital markets at Knight Frank, said the banking sector’s volatility continued to impede capital deployment in the Asia-Pacific, but he expects wealthy investors to play a pivotal role, even as institutional buyers are impacted by the higher cost of capital.
