Singapore 2nd Most Attractive Destination For Cross-Border Property Investments

SINGAPORE – A study conducted by CBRE found out that the city-state is Asia Pacific’s second most appealing city for cross-border real estate investments across all asset classes this year, up from 3rd place in 2022, reported The Business Times on Wednesday afternoon (18 January, SGT).

In comparison, rival commercial hub Hong Kong took the fifth spot, up from the 6th place last year, according to the real estate consultancy’s latest Asia Pacific Investor Intentions Survey. China’s reopening and more reasonable valuations have made the Chinese territory more appealing to property investors, placing Hong Kong in the top five for the first time since 2020.

Meanwhile, Tokyo remained as Asia Pacific’s number one most attractive city for cross-border property investments, while Vietnam’s Ho Chi Minh City landed on the 3rd place, followed by Sydney at the fourth spot.

Completing the top 10 are Melbourne at the sixth place, followed by Mumbai, Shanghai, Hanoi, and Seoul. However, CBRE expects core investors to focus on Japan, Singapore. and Australia in 2023.

In addition, 31 percent of the respondents said they intend to take advantage of prevailing market conditions this year by targeting distressed properties and assets collateralised by non-performing loans, with CBRE expecting opportunistic investment strategies to gain momentum this year.

Moreover, the property consultancy’s Head of capital markets for the region, Greg Hyland, foresees that real estate investment activity would accelerate by H2 2023

“Despite healthy levels of fundraising, most investors are adopting a cautious approach as they look for signs of yield expansion and the interest rate tightening cycle to stabilise.”

While the industrial property segment was once again the most preferred asset class by investors, 60 percent of the respondents expect to find discounts in retail properties and Grade A office space this year.

Furthermore, about 60 percent of the respondents plan to tap environmental, social and governance (ESG) standards in making investment decisions. However, the remaining 40 percent intend to delay ESG adoption because of higher costs amidst present economic conditions.