BY CHERYL NG
Straits Times
INVESTORS from Singapore remained Asia's biggest buyers of international real estate last year as capital outflows from the region hit a record.
Asian investors shelled out US$40 billion (S$54.5 billion) on property around the world in 2014, up 23 per cent over 2013.
Singaporean buyers accounted for a third of the total, said consultancy CBRE yesterday, with investors outlaying US$11.9 billion, up US$2.5 billion from 2013.
Chinese investors were next, with spending of US$10.1 billion as new players such as insurers sought to increase their allocation of funds to international real estate.
Hong Kong was in third place, with US$6.3 billion.
But Singapore fell out of favour as an investment destination, falling out of the top five places for Asian real-estate dollars last year after being fourth in 2013.
"Singaporean investors looked offshore as a result of compressed yields in their home market and a shortage of investible assets," said Ms Ada Choi, senior director for CBRE Research Asia.
Property cooling measures have hit property investing here, driving developers and sovereign wealth funds alike to venture abroad.
Though Singaporeans were active across the globe, including in the US, Europe, the Middle East and Africa, and the Pacific region, they invested the most in Asian countries such as Japan, said CBRE.
Singapore sovereign wealth fund GIC, for instance, invested US$1.7 billion to buy the entire office component of Pacific Century Place Marunouchi in Tokyo in October.
GIC also reportedly picked up a 49 per cent stake in five malls in New Zealand for $1.04 billion last November.
Just 39 per cent of Asian capital outflows was concentrated in the top five real estate destinations of London, Tokyo, Sydney, Shanghai and New York last year. A year earlier, these top five cities accounted for 60 per cent of Asian investments.
"Perhaps the biggest untold story for 2014 has been the movement into secondary gateway cities such as Paris and Los Angeles, as well as regional centres of the UK," noted Mr Marc Giuffrida, executive director of global capital markets at CBRE.
The diversification was also seen in investments across asset classes.
While Asian investments in offices were the highest, at 54 per cent, investments in hotels picked up 5 percentage points to 16 per cent from 2013, while industrial property rose 5 percentage points to 7 per cent.
"Investors feel that by looking to new markets and asset classes, they will be able to secure better yields and face less competition," added Mr Giuffrida.
Asian investments mostly went to Europe, the Middle East and Africa, which received US$13.7 billion, hardly changed from 2013.
Within Asia, investors doled out US$12 billion, marking a 58 per cent increase over the previous year.