Property speculators from Singapore have poured money into overseas real estate this year, amidst a cooling domestic market.
Large developers such as City Developments and Keppel Land, struggling to sell apartments in their domestic market are leading the surge towards overseas investment, turning Singapore into the largest foreign investor from the region in 2014.
Developers look overseas as domestic market cools
Data from Real Capital Analytics, commercial property investment specialists, shows that Singapore developers pumped €1.9bn into overseas markets in the nine months to September, increasing three times from the same period last year and representing the most in at least eight years.
Singapore developers are looking aboard in response to government measures to slow down property values, resulting in residential prices falling for four consecutive quarters, the longest period of declines since 2009.
Singapore property prices continue declines
Terence Tang, MD of capital markets and investment services for Asia at Colliers International said: "Many Asian countries such as Singapore are facing property cooling measures at home, so they are venturing to Western markets where they can find returns and are seeing a strong recovery".
Singapore's second-largest developer invested €220m in a plot of land in Tokyo in September and Keppel Land the third-largest builder, made its maiden investment in the United States in July, with a prime residential development in New York City. The €57m project is located on Manhattan's Upper East Side.
Singapore most significant overseas investor in Asia
The measures to stem growth and prevent a speculative bubble in Singapore's property market have brought residential prices down by around 4% from the peak in September 2013.
According to figures from New York-based RCA, overseas investments by developers have helped catapult Singapore into the top place among Asian countries investing in overseas real estate so far this year.
Overall, Singapore entities invested €7.9bn in overseas commercial property in the nine months to September, overtaking China with €6.8bn and Hong Kong with €5.9bn, according to RCA.
- Wednesday 03 December 2014