Singapore investors plough record amounts into real estate overseas

This article is more than 12 months old

GIC had a hand in three of the largest outbound deals last year

Singapore investors large and small ploughed record amounts of money into real estate overseas last year.

Around US$28.4 billion (S$37.2 billion) was outlaid - up 40 per cent on the US$20.4 billion spent. It also upended the old record of US$27.6 billion set in 2015.

Sovereign wealth fund GIC had a hand in three of the largest outbound deals last year, although real estate investment trusts, developers, private wealth and unlisted funds were buyers as well.

The huge spending made Singapore the fifth-largest source of capital last year globally, after the US, Hong Kong, China and France, said Real Capital Analytics, which compiled the data.

Singapore has also emerged as the largest Asian investor in the US, surpassing the combined total from Chinese and Hong Kong firms.

Investors based here sank US$9.5 billion into US real estate last year, compared with the combined US$7.3 billion from Chinese and Hong Kong.

And while foreign investment has tended to focus on trophy office, hotel and residential properties in central business districts, Singapore-based investors have preferred to focus on industrial, suburban multi-family and more niche asset classes such as student housing and data centres.

And while the major metropolitan areas attract the bulk of investment, Singapore-based capital is also entering secondary and tertiary US markets. Mapletree Investments, for example, bought an office building in central Minneapolis for US$258.5 million.

The largest Singaporean deal in 2017 was GIC's acquisition of Monogram Residential Trust through its stake in a Greystar fund for US$4.4 billion.

GIC, which was also Singapore's largest outbound investor last year, seemed to have shifted its strategy in the US from logistics to residential properties. It also started 2018 with a US$247.5 million investment in multi-family properties in the US.

The second-largest deal last year was GIC's acquisition of a portfolio of 24 student accommodation assets in the US with the Canada Pension Plan Investment Board and The Scion Group for US$1.1 billion.

This was followed by GIC's acquisition of a 95 per cent stake in 60 Wall Street, an office building, for US$988 million.

Then came Mapletree Investments' and Mapletree Industrial Trust's purchase of 14 data centres in the US for US$750 million.

Mr Priyaranjan Kumar, Cushman & Wakefield's regional executive director of capital markets in the Asia-Pacific, said Singapore has limited assets that capital can be deployed to.

"Hence, both sovereign and non-state companies have been pioneers in global real estate investments," he added.