Foreign investment made up 45.6% of Singapore’s property deals in 1Q2024 : Knight Frank

Hotel G is undergoing rebranding and asset enhancements measures after it was acquired in January for $180 million. (Picture: Samuel Isaac Chua / EdgeProp Singapore)

Inflows of foreign investment accounted for 45.6% of real estate investment value in Singapore for 1Q2024, according to a report by Knight Frank. Institutional investors injected a total $1.226 billion of investment into Singapore last quarter.

This is the highest proportion of incoming cross-border investment compared to other Asia Pacific (Apac) markets over the first three months of this year, according to the report by Knight Frank.

This comes as the region struggles to bring in foreign real estate investment. Overall, cross-border transactions in Apac experienced a 35.6% q-o-q drop in transaction volume in 1Q2024. According to Knight Frank, macroeconomic risks have turned most domestic investors’ interest inward.

Singapore experienced a more moderate drop of 29.2% q-o-q in cross-border investments over the same period, partially due to increased investor interest in the country’s hospitality sector.

The tourism industry for 1Q2024 recorded steady recovery driven by an increase in the Mice (meetings, incentives, conventions, and exhibitions) sector and tourist inflows from mainland China after the establishment of the China-Singapore 30-day mutual visa exemption.

“The hospitality sector attracted significant interest from institutional investors with its optimistic outlook,” says Christine Li, Knight Frank’s head of research for Asia Pacific.

Li adds that investors are particularly drawn to value-added opportunities and may form strategic partnerships with developers to enhance or redevelop assets to yield higher returns.

The most prominent examples were the acquisition of Citadines Mount Sophia Singapore and Hotel G Singapore. There are plans for both properties to undergo rebranding and asset enhancements measures.

The US remains the top source of foreign real estate investments to the Asia Pacific region, accounting for 43.8% of cross-border capital in 1Q2024. Singapore-based and Hong Kong-based capital took second and third place, accounting for 19.1% and 17.4% of cross-border capital respectively.