Singaporean investors have the most diverse exposure in Asia

Singaporean investors have the most diverse exposure of all Asian investors, according to data compiled by CBRE.

The country’s investors ploughed a total of $12bn into overseas assets in 2016, with offices in the UK and industrial assets in Europe and Japan making up a significant proportion of acquisitions.

Yvonne Siew, CBRE’s executive director for global capital markets, Asia Pacific, said: “Singapore has the most diverse sector exposure in Asia.”

Siew pointed to sovereign fund GIC’s acquisition of P3 Logistics Parks in 62 locations across nine countries in Europe, and Mapletree’s portfolio of offices in the UK and its purchase of US and UK student housing accommodations.

“Singapore is one of the earliest to seek global diversification and as such investors tend to be more explorative and innovative in finding new ways for yield creation in a seemingly borderless market,” Siew said. “We continue to see interest for alternative sectors such as healthcare, senior living, student housing, data centres and real estate debt.”

Asian outbound real estate investment was dominated by Chinese investors in 2016, accounting for nearly half of total investment—with 47% or $28.2bn. Overall outbound investment activity by Asian investors remained robust with institutional investors continuing to lead investment activity, contributing to six of the top 10 biggest outbound deals of the year.

Chinese investors remain active in deploying capital offshore into global real estate assets. Despite recent policies by the government restricting Chinese outbound investment, there continues to be a steady flow of Chinese capital overseas as investors seek to diversify their portfolios.

“With more scrutiny on cross-border capital flows and rigorous checks by the government which may lengthen the approval process, Chinese outbound real estate investment may moderate, gathering at a more sustainable rate,” Siew said. “Instead of larger transactions, Chinese investors may simply opt for a higher number of smaller deals.”

Chinese appetite for global real estate investment will, Siew said, remain solid but more cautious, with Chinese insurers and qualified asset managers being the active institutional investor class.

The US remained the most favoured destination for Asian capital, drawing 43% of the overall total, followed by Europe, the Middle East, and Africa as the second-favoured at 27%.