ហេតុអ្វីបានជាមូលធនអាស៊ីកំពុងដេញតាមទ្រព្យសម្បត្តិអចលនទ្រព្យនៅអាមេរិកនិងអង់គ្លេស

Asian outbound property investment has recovered strongly in the first half of the year. Despite the pandemic, student housing and retail are among the Western assets that are attracting Asian money

For an indication of the strength of Asian investors’ appetite for American and European commercial real estate, look no further than the latest string of deals completed by Mapletree Investments, the property arm of Temasek, Singapore’s state investment fund.

Since the end of August, Mapletree has acquired four purpose-built student accommodation assets in several regional cities in England, closed its first US office fund and bought two portfolios of logistics properties across major cities in America.

Since the eruption of the Covid-19 pandemic, the Asia-Pacific region’s own commercial property markets have continued to attract significant investment, initially because of the appeal of a region that handled the crisis more effectively than Western economies, but mainly because of global investors’ need to allocate more capital to Asian real estate.

Investors have been drawn to the vast growth potential of Asia’s emerging markets, the relative safety and transparency of the region’s advanced economies and the opportunity to deploy capital in increasingly popular alternative sectors, particularly data centres. Transaction volumes in the region rose 39 per cent year on year in the first half of 2021, just 6 per cent shy of 2019 levels, data from JLL shows.

However, less attention has been paid to the equally strong recovery in Asian outbound property investment, which increased 36 per cent year on year in the first half of 2021, to US$15.5 billion, data from CBRE shows.

The bulk of the capital, moreover, was deployed outside Asia. The United States and Britain were the first and third most popular destinations respectively for Asian cross-border investment, with Singaporean buyers alone accounting for two-thirds of Asian deals overseas, according to CBRE.

While Asia appeals to global real estate investors mainly because of its catch-up growth potential, Asian investors view the US and Europe as a post-pandemic “recovery play”, made more enticing by more attractive pricing in certain sectors and much deeper levels of liquidity and transparency.

Although fears about the risk of stagflation in advanced economies have unnerved financial markets, a strong vaccine-driven reopening has buoyed sentiment towards Western markets, especially sectors that stand to benefit most from the normalisation of economic activity.

Just as importantly, leading Asian cross-border investors – in particular, Singaporean buyers who overtook their mainland Chinese peers in 2018 as the dominant source of Asian outbound capital – are among the savviest institutional investors globally, betting on secular trends in the global economy and building platforms through partnerships with property owners and asset managers in different countries.

Gone are the days when Asian investors largely confined themselves to the ultra-liquid London office market. Over the past several years, Asian capital has targeted different sectors in different countries, with portfolios of logistics assets spread across multiple jurisdictions proving popular.

Despite the pandemic, student housing in Britain and the US has attracted significant investment. In June, Singaporean sovereign wealth fund GIC acquired two student accommodation properties in London as part of its joint venture with Unite Students, Britain’s leading provider of student accommodation.

Henry Chin, head of research for Asia-Pacific at CBRE, said Asian investors were likely to increase their exposure to high-quality offices in gateway cities in Europe and the US, where sentiment towards the sector has been “much more negative” since the pandemic struck.

Some Asian buyers see an opportunity to capitalise on the recovery in the stricken retail sector. Out of favour with investors long before the virus erupted, retail real estate in Western economies has been hit hardest, ravaged by lockdowns and the rapid acceleration of online shopping.

However, some types of retail properties, notably grocery, have proved quite resilient. In March, GIC teamed up with a US retail-focused real estate investment trust (Reit) and other investors to establish a platform targeting the acquisition of over US$1 billion in single-tenant net lease assets – free-standing properties that require minimal involvement from the landlord – comprising some of the most creditworthy American tenants, such as Whole Foods and Lowe’s.

In a sign of the willingness of Asian investors to make contrarian bets on Western retail, the family office of John Lim, the co-founder of ARA Asset Management, Asia’s largest real estate fund manager, announced last week that it was backing a new fund launched by Savills Investment Management to acquire British retail parks.

From a pricing standpoint, the case for buying certain types of Western retail assets is compelling. The average rental yield on prime retail warehouses in Britain currently stands at 6 per cent, while prime shopping centres in major cities – which are starting to attract investment – are trading as high as 7.75 per cent, data from CBRE shows.

In Singapore, Seoul and Shanghai, on the other hand, yields on shopping centres in core locations sit in a less attractive range of between 4.25 and 5.75 per cent.

To be sure, the long-term prospects for Asian retail real estate – which is better placed to cope with digital disruption and does not suffer from the acute oversupply of shopping centres that bedevils the US – are much brighter, justifying higher prices.

Yet, for Singaporean and South Korean investors, who lead Asia’s overseas acquisition drive, the need to diversify beyond their domestic markets acts as a powerful catalyst for seizing opportunities in the US and Europe.

Expect the recovery in Asian-cross border investment to shift up a gear in the coming months.