Australia now ranks #2 across the globe for Asian outbound commercial real estate investment

14 April 2022

After a muted year in 2020, outbound capital from Asia surged 69% year-on-year (y-o-y) in 2021 to US$54.6 billion, surpassing 2019’s pre-pandemic investment volumes. 

Closely following the United States (ranked #1) Australia moved up three ranks since 2019, from #5 to #2, as the market with the most outbound investments from Asia. Mainland China, the United Kingdom and Japan rank #3, #4 and #5 respectively.

While European gateway cities such as Paris and London saw inflow from Asian capital in 2019, the UK was the only European market to record a significant inflow from Asian capital in 2021. More Asian investors have shifted their emphasis back to the Asia Pacific region, where they can rely on stronger networks and local expertise to execute and evaluate deals.

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Commenting on this influx of Asian capital into Australia, Sameer Chopra Head of Pacific Research said, “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. The current geo-political situation, resilient cashflows of Australian assets and current exchange rate levels provide a good backdrop.”

Mark Coster, CBRE’s Pacific Head of Capital Markets, added, “Australia has benefitted as investors seek out markets that provide growth, scale and a stable business environment. 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.” 

From a global perspective, Singaporean capital dominated Asian outbound investment, accounting for six out of the top 10 outbound transactions. Singaporean investors deployed US$32 billion abroad, marking a significant increase of 164% y-o-y.

CBRE’s data highlights that Singapore was the most active source of Asian outbound capital globally, with six out of the top 10 outbound transactions involving Singaporean institutional capital and developer funds. 

Interest in the logistics sector also saw Asian investors pour some US$24 billion into industrial and logistics assets in 2021, surpassing office investments for the first time and further compressing global industrial yields, which dropped to 3.7% in Q4 2021.

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