Singapore Top Offshore Property Investment Destination

Singapore Top Offshore Property Investment Destination In Asia Pacific

SINGAPORE – Property investment in the city-state rose by 97 percent year-on-year to US$4.7 billion during the first half of the year, reported The Business Times on Wednesday afternoon (11 August, SGT), citing data from Real Capital Analytics (RCA).

While this is somewhat lower from “2019’s unusually high watermark”, RCA pointed out that this is the 3rd highest half-yearly figure.

Aside from that, over percent of the real estate volume came from cross-border investors, making Singapore the leading offshore property investment destination in the region for the 1st time ever, according to RCA’s latest report entitled Q2 Asia Pacific Capital Trends.

Notably, the majority of the capital was directly invested into office and industrial properties.

Real Capital Analytics said the robust performance of Singapore’s property investment market in H1 2021 is in line with Asia Pacific’s continuing recovery, with nearly all markets in the region witnessing steady sales growth during the second quarter.

Overall, real estate investment in Asia Pacific rose by 8 percent to US$77.6 billion during the first half of the year compared to H1 2020. Specifically, the figure for Q2 2021 reached US$40.3 billion.

Interestingly, RCA noted an increasing gap between top and bottom quartile CBD office assets across the region, indicating a divergence in property preferences by investors.

Real Capital Analytics said the trend was evident in Asia Pacific’s gateway cities like Tokyo, Seoul, and Sydney, where top quartile prices greatly outpaced bottom quartile prices during the middle of the year.

The sole exception was Singapore, where top quartile office prices – the traditional proxy for tracking price movements of Grade A office space – edged up by 3 percent during the 2nd quarter from the end of 2019. As for bottom quartile office prices, which is regarded by RCA as a better “indicator of the broader office market’s health”, climbed by 9 percent over the same period to hit a new high.

The increase occurred after new office price records were set in the city-state earlier this year. For instance, an office floor at Samsung Hub was sold at a record price of S$4,050 psf.

In addition, the disposal of Grade B office building Robinson Point for S$3,800 psf established a new benchmark price for an entire office building, shared David Green-Morgan, Managing Director for Asia Pacific at Real Capital Analytics.

He revealed that while office volumes in the city-state have picked up in 2021, with price growth across the board, it is one of the region’s most volatile office markets.
“But Singapore’s office price growth stands out from the rest of the region for another reason – it’s not just prime offices that are benefiting from this boom. Strong cross-border interest has spilled over into the secondary office market as well, with record levels achieved in the second quarter,” he added.

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