SINGAPORE – Singapore is the second most preferred city for cross-border investments this year, a study noted on Wednesday (Jan 20).<\/p>\n
It also cited logistics as the most popular sector for investors, while interest in the office sector has weakened.<\/p>\n
The findings come as the Economic Development Board reported that Singapore attracted about $17.2 billion in fixed asset investments last year amid the pandemic.<\/p>\n
“Singapore remains an important hub for foreign corporations looking to access South-east Asia,” said Mr Desmond Sim, head of research for South-east Asia at CBRE, which commissioned the survey.<\/p>\n
“Although the central business district rents declined in 2020, rents are forecast to display growth over the next three years, supported by low vacancy and strong demand,”<\/p>\n
“In fact, we expect office demand in 2021 to be fuelled by Chinese technology firms and non-bank financial services firms such as investment managers and hedge funds.”<\/p>\n
The report noted that Singapore is emerging as a viable alternative to Hong Kong among companies establishing Asia-Pacific headquarters.<\/p>\n
Meanwhile, Tokyo topped the study due to the availability of high-quality assets and its strong liquidity, the report noted.<\/p>\n
Seoul came third, followed by Shanghai and Ho Chi Minh City.<\/p>\n
The survey polled 492 investors who were mainly based in the Asia Pacific between Nov 9 and\u00a0Dec 14 last year.<\/p>\n
Respondents were asked about their buying appetite and preferred strategies, sectors and markets for 2021.<\/p>\n
The study revealed that there was broad-based improvement in market sentiment, with 60 per cent of investors intending to buy more real estate, the highest level since 2016.<\/p>\n
“The recent commencement of vaccination programmes in several countries around the world has further boosted market confidence,” it said.<\/p>\n
But interest in the office sector, which used to be the most popular for investment, weakened with the increased adoption of remote working.<\/p>\n
Demand for retail and hotels also remained soft, the report added, but noted that some opportunistic investors are still considering hotels as counter-cyclical plays, particularly in countries with strong domestic tourist markets such as Australia and Japan.<\/p>\n
Meanwhile, logistics came up tops as the most popular sector for investment, as the pandemic drove the acceleration of e-commerce, boosting demand for this asset class, the report said.<\/p>\n
Investors were also more interested in data centres, as demand surged for video conferencing and other platforms to support remote working. This then led to increasing requirements for data storage.<\/p>\n
The report added that there was also a rising number of investors including environmental, social, and corporate governance criteria (ESG) in their investments.<\/p>\n
“Nearly half of respondents, most of which came from Singapore, Australia and western markets, stated that they had already adopted ESG criteria in their investment strategies,” it noted.<\/p>\n
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