SINGAPORE (EDGEPROP) - Singapore’s office market has shown one of the strongest performances in the world, with volumes rising by over 175% y-o-y due to strong rental growth and net absorption, highlights JLL in its report on global capital flows.
Transaction volume in Singapore reached an all-time high, supported by Allianz and Gaw Capital’s US$1.15 billion ($1.6 billion) acquisition of Duo Tower in July.
China also saw an increase in transaction volumes. Notably, investment in Shanghai reached US$14.4 billion in the year-to-date, with US$3.5 billion received in the third quarter of the year.
Shanghai was the largest recipient of cross-border investments among Asia-Pacific cities in the first three quarters of the year, followed by Singapore and Sydney. Globally, Shanghai ranked third after Paris and London.
Sydney has logged several large-scale transactions this year. The largest deal was Blackstone’s US$1.1 billion acquisition of a portfolio of office assets from Scentre Group in the second quarter.
In the third quarter, foreign investment into Sydney came primarily from Canadian pension funds and Singaporean groups.
Cross-border capital inflows to Sydney is 88% higher year-to-date than the same period last year, with US$3.5 billion invested by foreign investors.
Asia-Pacific economies were also among the biggest capital sources for cross-border investments in the first nine months of this year, with Singapore, South Korea and Hong Kong making it to the top 10 list of capital exporters, observes JLL in the report.
“Asian investors are spreading their capital more broadly and are looking at markets such as continental Europe where debt costs are low, assets are available and markets such as Germany and France are seen to be beneficiaries post-Brexit,” says Stuart Crow, CEO of Asia Pacific Capital Markets at JLL.
“Asia Pacific’s real estate market is likely to hold steady as investors continue to allocate vast amounts of capital to commercial real estate in their search for yield without exposure to excessive risk,” he says.
JLL expects the Asia-Pacific’s commercial real estate investments to grow 13% for the whole of this year, indicating a further acceleration in the fourth quarter of 2019.
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