Singapore takes lead in Asia-Pacific cross-border investments with 22.8% surge

Singapore leads APAC investments: Singapore has emerged as the leading destination for cross-border investment in the Asia-Pacific region, according to a recent analysis by Knight Frank’s Asia-Pacific research team. In the first quarter of 2024, cross-border investment in Singapore surged by 22.8 per cent above the 10-year average.

Institutional investors, contributing $906 million in transactions, played a notable role in driving this growth, particularly in the hospitality sector. The resurgence of Singapore's tourism industry and increased acquisition activity in the hospitality market have fuelled investor interest in hospitality assets.

Institutional interest surges

Christine Li, Head of Research, Asia-Pacific at Knight Frank, noted that despite a 29 per cent decline in cross-border activities across Asia Pacific, Singapore stood out with its robust investment activity. The hospitality sector, in particular, has attracted significant interest from institutional investors due to its optimistic outlook and improving operational metrics. 

Li stressed the potential for increased investment activity in Singapore's hospitality sector, driven by value-added opportunities and strategic partnerships between investors and developers.

Meanwhile, South Korea and Japan have experienced a resurgence in commercial investment interest, particularly in the office sector. South Korea saw a 12.5 per cent QoQ rise in investment volume, reaching $5.8 billion, with office deals dominating the market.

Office sector reawakens

In Japan, despite an overall contraction in real estate investment volume, there is renewed investor interest in office and industrial assets, motivated by anticipated positive momentum in the office sector.

Neil Brookes, global head of capital markets at Knight Frank, highlighted the challenges in the market, including the cautious approach of foreign investors awaiting price adjustments and the potential impact of interest rate hikes on market liquidity. 

He stressed the importance of strategic partnerships and targeted investment approaches in capitalising on market opportunities amidst changing economic conditions.