Monday, 04 September 2017 13:41

After China, Singapore is the 2nd Biggest Asian investor in offshore real estate

Thailand Property Thailand Property TG Condo

Singapore-based property investors ploughed US$6.8 billion into global real estate, up 20% and the second highest in the first half of the year after China.

Singapore-based institutional investors, property companies and private equity ploughed US$6.8 billion (S$9.24 billion) into global real estate, up 20 per cent from US$5.6 billion a year ago. That figure is a little more than half of the US$12.7 billion invested in office, retail, mixed-use, industrial, hotel, residential and other commercial sectors in 2016.

For China, outbound investment in real estate in the first half-year more than doubled to US$25.6 billion versus US$10.1 billion for the same period in 2016. Top destinations for Singapore capital in the first half of 2017 include the United States (US$2.4 billion), China (US$1.2 billion) and Australia (US$635 million).

Across the region, Asian outbound investment into offshore real estate saw significant year-on-year gains in the first half of 2017. About US$45.2 billion of Asian outbound capital was directly invested into global property in the first half of 2017, representing a 98.4 per cent rise year-on-year against US$22.8 billion allocated in the first half of 2016.

Outbound investment from China remains the region's largest despite heightened regulation and capital controls, with Chinese sovereign wealth funds emerging as the largest single outbound investor class in the first half of 2017.

But China-based property companies and conglomerates have also been considerable buyers of offshore real estate assets in the first six months of 2017.

Singapore investors are poised to become major beneficiaries of heightened China capital controls. With the anticipated slowdown of outbound Chinese capital, Singapore investors have shown clear signs that they are both capitalised and confident enough to pursue outbound targets to both diversify portfolios and offset a competitive domestic landscape.

A new round of capital controls issued by China's State Council, or Chinese Cabinet, and the National Development and Reform Commission (NDRC) was issued on Aug 18, with a focus on offshore real estate investments.

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

"New regulations should help to ensure that future outbound investment is more financially sound and strategically focused, but the impact of Chinese capital on key global real estate markets should continue for some time."

Read 231 times Last modified on Monday, 04 September 2017 14:01
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