Singapore Clinch 11 Asia Pacific Cross Border Real Estate Investment Capital 2024
Singapore is expected to be a top real estate investment destination in the Asia Pacific region for cross-border capital in 2024. This is according to a market report published by Knight Frank on July 30. The city-state is projected to attract about 11% of all cross-border investment in the region.
Australia is predicted to take the top spot, drawing in 36% of the total cross-border investment capital, followed by Japan at 23%. Singapore will round out the top three destinations for cross-border investment capital this year.
Knight Frank’s report also predicts that 48% of inbound real estate investment capital into Singapore in the next year will go towards the office market, with 31% directed towards industrial assets. The remaining 19% will go into retail and 2% into hotels. This is supported by last quarter’s numbers, which saw a total of US$756.8 million ($1.017 billion) of inbound cross-border investment, largely driven by PAG’s acquisition of Mapletree Anson for US$567.5 million.
In terms of investment strategies, Knight Frank suggests that hotel and mixed-use assets present ideal opportunities, while certain hotel and office properties offer value-add prospects. Investors should also keep an eye out for potential partnerships between investors and developers to enhance or redevelop assets for higher returns and potential appreciation.
According to Victoria Ormond, head of global capital markets research at Knight Frank, private capital will continue to play a significant role in global investment for the rest of the year, as debt markets shape overall market dynamics. She predicts a six- to nine-month window for global capital to take advantage of current pricing and reduced competition before the expected market recovery becomes widely recognized.
Ormond adds that outbound capital from Japan and Singapore will be among the top sources of real estate investment capital in 2024, with investors targeting sectors and assets with strong potential for growth. She also notes that varying interest rates across the region will present numerous opportunities for investors to maximize their returns.
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Simon Matthews, director of debt advisory, Asia Pacific, at Knight Frank, adds that while interest rates in key markets are expected to stay relatively low, higher rates in countries like Australia, Hong Kong, Singapore, and South Korea may impact real estate values. However, he believes that this diversity presents opportunities for cross-border investments in the Asia Pacific region to grow by more than a third in the second half of 2024 compared to the same period in 2023.