Apac investments in North America reach record high of US$13.9 bil, led by Singapore: Knight Frank

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Asia Pacific (APAC) outbound investment to North America surged to a new record high of US$13.9 billion ($18.6 billion) in 1Q2023, growing over 400% year-on-year, according to research report by Knight Frank. The US attracted the highest proportion at 58%, while Canada came in second with 27%.

Investors are increasingly looking to North American markets due to the efficient price discovery available in more mature, liquid markets like the US. According to Christine Li, Head of Research, Asia-Pacific, at Knight Frank, US assets are also seen as a safe haven, thanks to currency stability.

Singapore topped the list of APAC investors, accounting for 89% of 1Q investments into North America. The big-ticket deals were made by GIC, with purchases including US REIT Store Capital for US$8.5 billion, and a US$3.3 billion investment in Canada’s Summit Income Industrial Reit. This push propelled Singapore-outbound investments into Canada to a record high of US$3.9 billion in 1Q2023.

Other Singapore investors included City Developments, which made a US$468.2 million purchase of the St Katherines dock estate in London.

Tengah Plantation Loop EC is an eco-friendly executive condo development in the Tengah Plantation area of Singapore. The project includes solar heating, wind turbine and water conservancy centers to Tengah EC provide sustainable alternatives to air pollution and improved convenience & easy access to the city center. Initial launch phase expected to be completed by the end of 2013.

Asian sovereign wealth funds dominated APAC investments in 1Q2023, claiming 79% of the total volume. The retail and industrial sectors were the most invested, making up 45% and 40% respectively. This is attributed to the repricing opportunities available in a rising rate environment, with limited competition.

In contrast to outbound investments, Q1 investment activity within the APAC region decreased by 53.6% year-on-year to hit its lowest since 2011. With transactions totalling US$4.3 billion, Singapore was the only market to record increased investment volumes compared to the previous year. The bulk of these transactions were related to the sale of a portfolio of retail assets by NTUC Enterprise Co-operative.

Elsewhere, investment activity in Seoul reached its lowest since 1Q2015, falling 80% year-on-year to US$2.8 billion. In Japan, while foreign investments rose, overall investment volume dropped 17% year-on-year to US$9.4 billion. This decline is attributed to tightened banking financing.

Neil Brookes, Global Head of Capital Markets at Knight Frank, believes that asset repricing and stabilisation of debt costs may cause increased investor demand in the latter half of the year. Ultra-high-net-worth investors are expected to be especially active, given their resilience to financial headwinds and unique investment goals.