Singapore overtook the US as the largest investor in Asia Pacific real estate for the first time: Knight Frank

Knight Frank’s 3Q2023 Asia Pacific Capital Markets study discovered that Singapore investors injected almost US$ 8.5 billion into Asia Pacific real estate, exceeding the America’s cross-border financial investment worth by nearly 50%.

“For commercial estates, the combination of restricted supply of institutional-grade properties and continual long-lasting demand from e-commerce, life science and modern technology are sustaining financial investment interest. Likewise, the information center field is significantly viewed as a stable, lasting investment business opportunity,” states Knight Frank head of research Asia Pacific Christine Li.

Singapore has become the key provider of Asia Pacific realty investments YTD, surpassing the United States for the very first time, according to a news report by Knight Frank.

Asia Pacific’s business real estate industry observed minimal movement in 3Q2023, with investment activity contracting 53.4% y-o-y. According to Knight Frank, the noticeable withdrawal from residential and overseas buyers emphasizes their hesitation to invest in the current high-interest price environment, in which yield spreads have tightened to a specific level that specific markets are experiencing negative danger premiums.

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Knight Frank global head of capital markets Neil Brookes says lots of nonpublic business offices and government-linked firms (GLCs) in Singapore retain considerable capital available to be deployed. The broader market dislocation caused by swiftly increased credit costs creates possibilities for all equity investors to use capital while lots of some other institutional investors are resting on the side projects, he adds.

In feedback to these challenges, investors in the area have changed their emphasis to new economy assets, particularly in the industrial and data center sectors. At the same time, the procurement of office has taken a backseat, reflecting the constantly difficult business view and a weak return-to-office action.

“The force of the Singapore dollar is also driving big organizations like GIC and many other GLCs to pursue opportunities in industry namely Japan, China, South Korea and Australia. Notably, GIC has continually boosted its allowance to the real estate property class, with investments in the United States presently representing approximately 22.4% of the complete incoming assets quantity from Singapore,” says Brookes.

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