Local investors dominating commercial property deals

Business Times: Mon, Nov 14
LOCAL investors’ share of commercial property deals in Singapore rose in the first nine months of the year as interest from the West remained muted. According to fresh data from CB Richard Ellis (CBRE), Singapore companies and investors accounted f…

LOCAL investors’ share of commercial property deals in Singapore rose in the first nine months of the year as interest from the West remained muted.

According to fresh data from CB Richard Ellis (CBRE), Singapore companies and investors accounted for 89.3 per cent of the $9.55 billion investment turnover in the period.

This proportion exceeds the 83 per cent for the whole of last year, when commercial property investment sales came up to $17.21 billion.

It is also far higher than 2007’s 55 per cent, when $20 billion of commercial property changed hands.

Foreign investors have taken a back seat in the local commercial real estate scene following the global financial crisis.

In the boom year of 2007, capital from America, Europe, Australia, and other areas outside of Asia made up 41.4 per cent of cross-border inflows while the rest came from within Asia.

But funds from the US and Europe have diminished significantly, CBRE said. Since the beginning of 2009, Asian investors have risen in prominence, contributing to 90.4 per cent of cross-border inflows.

‘The US and European players who have sold off in the last two years have shifted their focus back to their own domestic markets,’ said CBRE head of research for Singapore and South- east Asia Petra Blazkova.

‘Conversely, Hong Kongers and Malaysians who divested heavily are likely to be back in the Singapore market in the long term.’

Between the third quarter of 2009 and Q3 2011, the top five cross-border purchasers were from Germany, Australia, Indonesia, Malaysia, and Hong Kong.

German pension funds, Australian developers, and Indonesian private investors were particularly active in acquisitions.

Mainland Chinese investors and developers, which have been active buyers in the residential property sector, were ‘noticeably absent’ in the commercial sector, CBRE said.

Singapore investors have also been making their mark overseas, acquiring commercial properties in China, Hong Kong, Australia, and Korea.

In fact, CBRE said they were the largest exporter of capital in Asia-Pacific’s commercial real estate sector in the last four quarters, partly due to the strong Singapore dollar.

It is not just the nationality of investors which has changed. While institutional investors such as unlisted property funds, banks, insurance companies, and syndicates were the most active buyers in 2007, they have been overshadowed by real estate investment trusts (Reits), publicly listed developers, and real estate companies.

 
Source: Business Times © Singapore Press Holdings Ltd

About Propertyguru Expert

Website contend is hand picked and high demand. Marketing Manager at Huttons Asia Pte Ltd. Indonesian Focusing in Private Residential Singapore. *Service Quality Assured. *Top 300 producer in 2011.