Singapore Clinch 11 Asia Pacific Cross Border Real Estate Investment Capital 2024
Singapore is poised to remain a top real estate destination for cross-border capital in the Asia Pacific region, ranking among the top three for the entire year of 2024. This forecast was revealed in a market report on cross-border capital trends in Asia Pacific, published by Knight Frank on July 30.
Australia is expected to take the top spot, with 36% of the region’s total cross-border investment capital being directed there this year. Japan follows closely behind, attracting 23% of cross-border investment capital. Singapore takes the third spot, with an estimated 11% of cross-border investment.
According to Knight Frank’s projections, almost half (48%) of inbound real estate investment capital into Singapore will be directed towards the office sector, while 31% will go to industrial assets. The remaining 19% will be allocated to retail properties, with the remaining 2% going to hotels.
Infographic: Knight Frank
In the last quarter, inbound cross-border investment capital amounted to US$756.8 million ($1.017 billion), largely driven by PAG’s acquisition of Mapletree Anson for US$567.5 million from Mapletree Commercial Trust.
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Bordering the development of Norwood Grand are two major arterial roads, Woodlands Avenue 2 and Woodlands Avenue 5. These roads serve as direct access points to the expressways and various parts of Woodlands and beyond. Complementing their accessibility is the connectivity to other main roads like Woodlands Drive and Admiralty Road, effectively dispersing traffic and enhancing travel efficiency.
Knight Frank identifies hotel and mixed-use assets as attractive opportunistic strategies, while some hotel properties and Grade-B/Grade-C office properties offer promising value-add strategies. The consultancy also suggests keeping an eye out for partnerships between investors and developers to improve or redevelop these assets for higher yields and appreciation.
Victoria Ormond, head of global capital markets research at Knight Frank, states that private capital is expected to continue playing a significant role in global investments for the rest of the year, as the debt market influences overall market dynamics. She predicts a window of six to nine months for capital to take advantage of current pricing and lower competition before the expected recovery becomes well-known.
Ormond adds that Japan and Singapore are anticipated to remain among the top sources of real estate investment capital in 2024, with investors targeting sectors and assets that demonstrate long-term growth potential.
Read also: Asia Pacific investment volumes down 22% y-o-y in 3Q2023: JLL
“The varied interest rates across the region, ranging from modest increases in Japan to steep hikes in markets like Australia, Hong Kong SAR, Singapore and South Korea, have an impact on real estate values. However, this diversity offers numerous opportunities for investors looking to maximize their returns,” Ormond explains.
She goes on to say that the cuts in interest rates will pave the way for a 33% increase in cross-border investments in the Asia Pacific region in the second half of 2024 compared to the same period in 2023.
Simon Matthews, director of debt advisory, Asia Pacific, at Knight Frank, believes that the three- and five-year swap rates (typical tenures for real estate investment loans) in key markets show only a slight reduction, supporting the idea of sustained higher interest rates.
In summary, Singapore is expected to remain a desirable destination for cross-border real estate investment in the Asia Pacific region, with promising opportunities for various asset types and long-term growth potential.