A 33 per cent year-on-year decline in outbound real estate investment has failed to stop Singapore from topping the category in Asia for the second consecutive year, new data from CBRE has shown. 

According to the firm, US15 billion that was recorded for the country in 2019, compared with US22 billion in 2018.

Overall, Asian outbound commercial real estate investment fell 17 per cent y-o-y to US$45 billion in 2019, with the perpetuation of capital controls in Mainland China believed to be the primary reason for the moderation in overall investment activity across the region.

Source: CBRE 

CBRE Head of Capital Markets for Singapore, Michael Tay, said the country's 33 per cent decline could be attributed to the lack of large portfolio transactions recorded in 2019.

"In 2018, Mapletree Investments acquired two overseas logistics portfolio that amounted to US$4.2 billion.

"While office assets have been typically favoured by Singapore-based investors, it is observed that in 2019, there had been stronger interest among a select number of Singapore investors shifting to look for income-generating assets in alternative sectors such as student housing.” 

In 2019, Singapore Press Holdings acquired a student housing portfolio in the UK for US$579 million, while Mapletree Investments purchased two purpose-built student housing buildings in Coventry, UK for US$117 million.

Source: CBRE

CBRE Asia Head of Capital Markets, Tom Moffat, said overall investment momentum in 2019 was also propelled by Korean investors, whose full-year investment volume grew by 66 per cent to US$12.5 billion.

"Nearly 70 per cent of the total Korean capital was invested in European markets," he said.

“As Chinese investors decelerate their outbound investment activity, we’ve seen Korean investors counteract this and continue to dominate the offshore investment landscape, expressing a strong interest in office, hotel and logistics sector assets.

Low financing costs and the hedging premium between the Won and Euro continue to motivate investors from Korea.”

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