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Singapore tops Asian outbound real estate investment for third consecutive year

This accounts for $12.1b worth of deals in 2020.

Asian outbound commercial real estate investment volume declined 37% YoY to $30 b in 2020 as restrictions on travel and site inspections affected purchasing activity, according to global commercial real estate services company CBRE. 

Greg Hyland, head of capital markets in Asia Pacific for CBRE, said Singapore investors have invested overseas because the pool of assets available at home is relatively small.

“What’s more, when it comes to overseas acquisitions, Singapore investors are generally well regarded as a sophisticated and savvy group who are used to investing offshore, while being prudent as to where they invest in their search for what they conclude will give the best risk-adjusted returns,” he added.

In 2020, Singapore investors’ top real estate investment destinations include Beijing, London, and Seoul.

Across the region, the United States was the top destination for outbound capital which amounted to $7b worth of funds.

Korea was reported to be the second-largest source of outbound funds overall. It accounted for nearly half of Asian outbound investment stateside, mainly due to the Korean won’s lower hedging costs as opposed to the U.S. dollar.

Coming in at third is Mainland China, underpinned by several major purchases in Australia. Outbound investment from Mainland China is considered to have rebounded slightly, but the figures remain below historical highs.

Henry Chin, CBRE's global head of investor thought leadership and head of research for Asia Pacific, said there is an optimistic view that real estate investment will improve in the coming months.

“Despite the weaker outbound investment volume in 2020, we are optimistic that real estate investment will pick up over the next 12 months. CBRE’s 2021 Asia Pacific Investor Intentions Survey found that 70% of investors in the region intend to purchase assets overseas in 2021, suggesting a mild recovery in Asian outbound investment volume this year,” he explained.

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