The Asia Pacific region continues to hold on to its position as the top source of global capital in H1 2023, with Singapore, Hong Kong, and Japan seizing spots among the top five global deployers of capital.
Colliers’ recently published Global Capital Markets: Insights & Outlook – Global Capital Flows report reveals a detailed panorama of capital deployment, marking Singapore as the zenith global spender, surpassed only by the US.
Singapore, or the Lion City, has manifested an impressive investment portfolio, accumulating cross-border capital investments amounting to USD 21,840 million in H1 2023, embodying approximately a quarter of total investments. Astonishingly, its spending is threefold compared to Canada, which holds the third position.
Hong Kong and Japan have also emerged as significant players, with respective expenditures of USD 6,508 million and USD 5,151 million within the initial half of this year.
Chris Pilgrim, Managing Director, Global Capital Markets, Asia Pacific at Colliers, highlighted that momentum was principally driven by substantial institutions in Singapore and Japan, accompanied by a surge from Australian superannuation funds.
In the first half of 2023, notable capital has been deployed globally, primarily from the APAC region, with the US maintaining its status as the most liquid market. Moreover, the UK has seen an influx of capital from the APAC region, owing partially to its swift market re-valuations compared to regions in Europe and Asia Pacific.
APAC’s real estate investors, rich in equity, have been diversifying into growth sectors within real estate, like healthcare, senior living, and student housing. Also, the increased domicile of funds from North America and Europe in Singapore implies a growing attraction to the APAC region.
Asia Pacific, meanwhile, has fortified its global stance, evidenced by healthy investment growth in Japan, China, Australia, and Singapore. Singapore’s cross-border capital now constitutes 24.9% of total investment, witnessing a significant rise from 8.9% between 2018-2022, primarily focused on regional real estate.
The report also highlighted the promising economic growth projections for the Asia Pacific region, anticipated to escalate to 4.6% this year, a considerable increase from 3.8% in 2022. This suggests that the region could be contributing nearly 70% to global economic growth in 2023.
Pilgrim concluded with an optimistic outlook, expressing confidence in the continuous outperformance of the Asia Pacific markets and foreseeing the sustained dominance of capital from the region in global real estate markets.