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Singapore named world's 5th largest real estate investor & largest Asian investor in US

By EdgeProp Singapore

/ The Edge Singapore |

January 29, 2018 4:38 PM SGT

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SINGAPORE (Jan 29): Singapore saw its outbound real estate investments soar 40% on-year to a record high of US$28.4 billion ($37.2 billion) in 2017 – upending the US$27.6 billion achieved in 2015 to emerge as the fifth largest real estate investor globally, according to data from Real Capital Analytics and Cushman & Wakefield.

In a Monday announcement, Cushman & Wakefield adds that Singapore has also become the largest Asian investor in the US – surpassing the combined total from Chinese and Hong Kong firms with a focus on industrial, suburban multi-family and more niche asset classes, including student housing and data centres.

While the major metropolitan areas have received the bulk of investment from the city state’s investors, the commercial real estate services company observes that Singapore-based capital has been flowing into secondary and tertiary US markets as well.

This phenomenon was led by Singapore sovereign wealth fund GIC’s US$4.4 billion acquisition of Monogram Residential Trust last year, as part of its move to shift its strategy in the US from logistics to residential properties.

GIC, which was Singapore’s largest outbound investor for 2017, this month announced its US$247.5 million investment in multi-family properties based in the US.

In particular, Cushman & Wakefield notes that while Singapore’s investments remained concentrated in the Asia Pacific region on a global scale to account for over 40% of the exposure in 2017, some European markets are also becoming increasingly attractive to the city state’s investors.

German real estate, for example, appears to have “emerged to be the poster child in the post-Brexit world” given the surging outbound investments from Singapore-based investors.

Highlighting Singapore as a long-standing trade surplus economy with a small domestic deployment base, Priyaranjan Kumar, Regional Executive Director, Capital Markets, Asia Pacific, believes both sovereign and non-state companies to be “pioneers in global real investments”.

“Singapore-based investors are targeting assets supported by strong secular drivers and entering markets offering attractive relative values – both of which augur well for continued robust cross-border transaction activity as the cycle continues,” comments David Bitner, Vice President, Head of Capital Markets Research, Americas.

Sigrid Zialcita, Managing Director, Research, Asia Pacific, adds: “While market dynamics and global macroeconomics could dictate the allocation of funds, Singapore-based investors are largely long-term investors in real estate and we expect this broad outbound trend to continue to persist. The normalisation of monetary policies by central banks is expected to be gradual and conditions will remain supportive of real estate investments globally.”

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