Singaporean investors took pole position for outbound real estate investments from Asia in the first half of 2018, accounting for 36% of the US$25.3 billion total capital outflow to the sector from the region, according to CBRE Group Inc.
Yvonne Siew, executive director at CBRE's Global Capital Markets Asia Pacific, said outbound investments are part of a long-term strategy for many Singaporeans seeking portfolio diversification and yields enhancement, amid limited opportunities and compressed yields in the local market.
Investors from the city-state injected US$3.4 billion into European real estate and US$2.27 billion toward the U.S. logistics sector during the period, CBRE noted.
Outbound investments from Asian property companies accelerated in the first half to 50% of the region's total outbound investments, up from 27% in the prior-year period. CBRE observed a similar trend with real estate investment trusts, which have increased their offshore investments in 2018.
Ascendas Real Estate Investment Trust and CapitaLand Commercial Trust each signaled their entries into Europe's property sector in the first half, when they respectively agreed to spend about £207.3 million and €342.7 million on separate transactions in the U.K. and Germany.
Intra-Asian capital outflow, meanwhile, reached US$8.5 billion in the six months ended June 30. The amount was primarily directed toward Hong Kong, China and Japan, and made up almost a third of the total global outbound investments made by Asian investors in the period, according to Tom Moffat, CBRE's head of capital markets Asia. He added that several high-profile property transactions are expected in Singapore in the second half of 2018.
On the other hand, Chinese investors' overseas purchases slowed down in the first half as they began to sell more assets offshore, particularly in the U.S. and Europe, to improve balance sheets and ensure profit flow, CBRE added.