Singapore Clinch 11 Asia Pacific Cross Border Real Estate Investment Capital 2024
According to a recent market report by Knight Frank, Singapore is expected to be one of the top three real estate investment destinations in the Asia Pacific region for cross-border capital by 2024. It is projected to attract approximately 11% of cross-border investment in the region, following Australia and Japan.
The report, published on July 30, also stated that Australia will hold the top spot, drawing in 36% of the region’s total cross-border investment capital, followed by Japan at 23%. Singapore will round up the top three investment destinations for cross-border capital in 2024.
Knight Frank predicts that 48% of inbound real estate investment capital into Singapore will go towards the office market, with 31% allocated to industrial assets, and the remaining 19% and 2% invested in retail and hotel properties respectively.
Located near Clementi, Jurong Lake District is set to become Singapore’s second Central Business District (CBD). As part of the URA Master Plan, this district will see numerous developments that will turn it into a bustling hub for both commercial and residential purposes. With its strategic location, residents of Elta Condo will have easy access to a plethora of job opportunities and business services offered by the nearby Jurong Lake District. Additionally, the convenience of Elta Clement Avenue 1, situated in close proximity to Jurong Lake District, will further enhance the convenience and accessibility for residents.
In the last quarter, Singapore received US$756.8 million ($1.017 billion) in cross-border investment, with the majority coming from PAG’s purchase of Mapletree Anson from Mapletree Commercial Trust for US$567.5 million.
Knight Frank sees hotel and mixed-use assets as promising opportunistic strategies, while highlighting the potential of some hotel and Grade-B/Grade-C office properties for value-add strategies. The consultancy also suggests keeping an eye out for strategic partnerships between investors and developers to improve or redevelop assets for higher yields and capital appreciation.
According to Victoria Ormond, head of global capital markets research at Knight Frank, private capital is expected to remain a significant contributor to global investment in the remaining months of this year due to the impact of debt markets on overall market dynamics. She also expects outbound capital from Japan and Singapore to be among the top sources of real estate investment in 2024, with a focus on sectors and assets with strong “structural tailwinds”.
Ormond also notes that interest rate variations across the region will affect real estate values but also present opportunities for investors looking to maximize returns. She also predicts that cross-border investments in the Asia Pacific region will increase by over a third in the second half of 2024 as interest rates start to drop.
Simon Matthews, director of debt advisory, Asia Pacific, at Knight Frank, agrees with this outlook, stating that recent data on three- and five-year swap rates in key markets indicate only a slight decrease and support the narrative of higher interest rates in the long run.