Following a quiet year in 2020, outbound capital from Asia increased 69 per cent year on year to US$54.6 billion in 2021, exceeding pre-pandemic investment volumes in 2019, with Australia a big recipient.
Closely following the United States (ranked first), Australia has risen three places since 2019, from 5 to 2, as the market with the largest outbound Asian investments, according to CBRE’s latest capital flows report.
US$6 billion from Asian investors flowed into Australia in 2021, with 75 per cent of this amount coming from Singaporean investors.
One of the largest inbound deals in 2021 involved the US$674 million purchase of a 50 per cent share of Grosvenor Place in Sydney by US-based Blackstone.
Topping this was the 100 per cent acquisition of the Melbourne Quarter Tower in Melbourne by the National Pension Service of Korea for US$881 million.
Mainland China, the United Kingdom, and Japan are ranked third, fourth, and fifth, respectively.
While European gateway cities such as Paris and London experienced inflows from Asian capital in 2019, the United Kingdom was the only European market to experience major inflows from Asian capital in 2021. More Asian investors are returning to the Asia Pacific area, where they can depend on better networks and local experience to execute and analyse transactions.
“Our January 2022 Investor Intentions Survey had pointed to Australia retaining its relative attraction, with Sydney a top 4 preferred destination for cross-border real estate investment,” said Sameer Chopra, Head of Pacific Research at CBRE.
“The current geo-political situation, resilient cashflows of Australian assets and current exchange rate levels provide a good backdrop.”
Singaporean capital led Asian outbound investment on a worldwide scale, accounting for six of the top ten outbound deals. Singaporean investors sent US$32 billion abroad, a 164 per cent rise year on year.
According to CBRE statistics, Singapore was the most active source of Asian outbound capital internationally, with Singaporean institutional capital and developer funds involved in six of the top ten outbound transactions.
Asian investors also poured approximately US$24 billion into industrial and logistics assets in 2021, topping office investments for the first time and further compressing global industrial yields, which fell to 3.7 percent in Q4 2021.
“Australia has benefitted as investors seek out markets that provide growth, scale and a stable business environment,” Mark Coster, CBRE’s Pacific Head of Capital Markets, said.
“We have seen increasing interest across all asset classes, particularly office, industrial and retail, as well as strong enquiry from groups looking to invest in real estate debt.”