Singapore, Hong Kong and Japan Among Top 5 Sources Globally of Cross-border Real Estate Capital

Singapore, Hong Kong and Japan were amongst the top five sources globally of cross-border real estate capital in 2023 according to data from MSCI, with Singapore coming in second place behind the US.

In fact, investors from Asia Pacific spent $48.1 billion on properties overseas, thus becoming a major source of capital for real estate in other regions.

Simon Smith, Head of Asia Pacific Research and Consultancy at Savills, says, “The data demonstrates how powerful Asian investors have become on the global stage, investing nearly $20 billion into the US and Canada and more than $5 billion into Europe.

“Asia was relatively strong in a year where US and European investors pulled back due to troubles in their home market, nonetheless the growth of private wealth and institutional capital across this region means it will continue to export capital.”

At a total of $25.3 billion invested in overseas real estate, Singapore demonstrated its outsized financial influence. Per capita, this was more than 40 times the amount spent by US investors.

Japan invested $8.1 billion of capital in foreign real estate in 2023. Besides heavy investment in US property, Japanese investors also ploughed a significant amount in the Asia Pacific region, with Australia and Indonesia being their top markets.

“Less competition from domestic investors will have helped Asian investors in North America and Europe,” says Smith. “Furthermore, Asia’s largest investors have strong international businesses all over the world.”

Hong Kong investors spent $8.4 billion overseas, including a substantial proportion allocated to projects in China - the sixth most popular destination for overseas capital. However, Chinese investors spent little outside of their home market last year.

Tokyo, Singapore and Hong Kong were also in the top 10 destinations for overseas real estate capital. While US investors accounted for most of the spending in Tokyo, Asian investors had their eyes on real estate in Singapore and Hong Kong.

Jeremy Lake, Managing Director of Investment Sales & Capital Markets, Savills Singapore says, “The market has been steadily moving along since the second half of 2023, and we have been seeing investment interest in commercial real estate here, mostly from non-institutional buyers. With expectation of US interest rate cuts, we believe there will likely be more interest as confidence in the market begins to return and the number of deals to increase down the road.”

Alan Cheong, Executive Director, Research & Consultancy, Savills Singapore adds, “For outbound capital, Singapore investors are drawn to overseas markets where they find positive carry. For inbound capital, investors are drawn more towards her safe haven status.”