in Greater China

Apac investors have driven North America’s commercial transaction volumes to a new record high in 1Q2023, with US$13.9 billion ($18.6 billion), according to a report by Knight Frank. This was a year-on-year increase of more than 400%.

The US saw the majority of this volume, at 58%, followed by Canada at 27%. Singapore investors led the charge, representing 89% of the total investment, with GIC being the biggest investor.

Christine Li, head of research, Asia-Pacific, at Knight Frank, says investor interest rose due to the efficiency of price discovery in North America’s mature, liquid markets.

“In times of crisis, US assets are often seen as a safe haven given the currency stability,” she says.

GIC’s investment in US REIT Store Capital and its purchase of Canada’s Summit Income Industrial Reit propelled Singapore capital outflows into Canada to an all-time high of US$3.9 billion in 1Q2023.

Other notable Singapore investors in North America in 1Q2023 include City Developments, which made a US$468.2 million purchase of the St Katherine’s Dock estate in London.

Asian sovereign wealth funds dominated Apac outbound investments, accounting for 79% of the total volume, with the retail and industrial sectors making up 45% and 40% respectively.

“We have seen an increased interest in retail and industrial assets due to repricing opportunities in a rising rate environment while there is limited competition,” adds Li.

Meanwhile, in Apac, investment activity fell 53.6% year-on-year in 1Q2023. Singapore was the only market to record higher investment volumes, with a total of US$4.3 billion in 1Q2023. This was largely driven by the sale of a portfolio of retail assets by NTUC Enterprise Co-operative.

In Seoul, investment activity hit its lowest level since 1Q2015, with a transaction volume of US$2.8 billion – down 80% year-on-year. Japan’s foreign investments rose, but overall transaction volume still fell 17% year-on-year, due to concerns over banks tightening financing.

JCube is set to close in August to make way for a 40-storey residential and commercial development, JCube Condo Residence, estimated at S$2,100/psf and linked to Jurong East MRT interchange. Launch slated for second half of 2023, it adds to anticipation of potential residential launches JCube Residence in the vicinity.

Neil Brookes, global head of capital markets at Knight Frank, is optimistic about capital deployment in Apac, highlighting that asset repricing and stabilising debt costs will result in increased investor demand.

He adds that ultra-high-net-worth investors, “with their unique investment goals and resilience to financial headwinds, are expected to play a pivotal role in capital deployment”.