Singapore is third most preferred destination in Apac for cross-border real estate investment in 2022: CBRE

January 21, 2022

According to CBRE, Singapore continues to draw investors from Japan, Taiwan and beyond Asia Pacific for its strong office rental growth.

SINGAPORE has been ranked the third most preferred destination for cross-border real estate investment in Asia-Pacific in 2022, according to the findings of CBRE’s latest Asia Pacific Investor Intentions Survey.

Tokyo took the top spot for a third consecutive year, with Shanghai coming in second.

The survey, which covers all property types, found that 60 per cent of investors intended to make more acquisitions this year than in 2021. Within Asia-Pacific, Singaporean, South Korean, Japanese and Australian investors displayed the strongest purchasing intentions.

“With overall investor appetite expected to remain strong, we are predicting 2022 to be a banner year for real estate investment across the region,” said Greg Hyland, head of capital markets, Asia-Pacific for CBRE.

In fact, the consultancy forecasts turnover for Asia-Pacific commercial real estate investment to increase by 5 to 10 per cent to around US$150 billion in 2022.

According to CBRE, Singapore continues to draw investors from Japan, Taiwan and beyond Asia-Pacific for its strong office rental growth. The country has seen a series of acquisitions by international fund managers in anticipation of “steady rental growth, limited new supply and strong leasing demand from technology companies”, it noted.

For Tokyo, which remained the top city for cross-border investment, its availability of low-cost financing, high liquidity and large volume of mature multifamily assets make it a market with “continued strong appeal” for international investors, CBRE said.

The consultancy also noted that second-placed Shanghai continues to attract considerable Asian capital. Despite an influx of new supply, office rents in the city are projected to stabilise in 2022 because of solid leasing demand from finance, life sciences and technology firms, it said.

Other notable movers in CBRE’s survey include Hong Kong, which rejoined the top 10 list after slipping out last year, and Sydney, which is seeing resurgent interest in offices and logistics properties.

CBRE also shared additional insights from its survey that are likely to shape real estate investment in 2022.

For one thing, while logistics remains the preferred sector (36 per cent) for investors, more are shifting their sights to office assets after the introduction of hybrid working was found to have only a “negligible” impact on brick-and-mortar office requirements, it noted.

Data centres continue to be the top focus (41 per cent) for investors among alternative assets, while demand is expected to strengthen for cold storage (35 per cent) and healthcare (31 per cent), CBRE revealed. On the other hand, real estate debt, one of the more popular alternative sectors among investors, garnered less investor interest in its survey.

CBRE also noted an increasing number of investors integrating environment, social and governance (ESG) criteria into their investments. This includes prioritising the purchase of buildings with green certification and retrofitting existing properties to enhance energy efficiency, water usage and wellness, it said.