In a recent analysis conducted by Knight Frank’s Asia-Pacific research team, Singapore has solidified its position as the premier destination for cross-border investment in the region. The findings reveal a remarkable surge of 22.8 percent above the 10-year average in cross-border investment during the first quarter of 2024, underscoring Singapore's growing appeal as a lucrative investment hub.
The remarkable growth in cross-border investment in Singapore during the first quarter of 2024 was notably buoyed by institutional investors, whose contributions totaled $906 million in transactions. Their significant involvement, particularly in the hospitality sector, has been instrumental in driving this surge. The resurgence of Singapore's tourism industry, coupled with heightened acquisition activity in the hospitality market, has sparked considerable interest among investors eyeing hospitality assets.
Christine Li, Head of Research, Asia-Pacific at Knight Frank, noted that despite a 29 percent 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 percent QoQ rise in investment volume, reaching $5.8 billion, with office deals dominating the market. 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, the global head of capital markets at Knight Frank, has drawn attention to the hurdles facing the market, citing the cautious stance of foreign investors who are awaiting price adjustments and the looming potential impact of interest rate hikes on market liquidity. Emphasizing the significance of strategic partnerships and precise investment strategies, Brookes underscores the necessity of adeptly navigating market opportunities amidst evolving economic conditions.