Apac investments in North America reach record high of US$13.9 bil, led by Singapore: Knight Frank
Apac investors’ outbound investments to North America reached a record high in 1Q2023, according to a research report by Knight Frank. The total transaction volume from Asia Pacific to North America rose a staggering 400% y-o-y to US$13.9 billion ($18.6 billion).
Leading the way were US investments at 58%, followed by Canada at 27%. Christine Li, head of research, Asia-Pacific, at Knight Frank, notes that US assets are often seen as a safe haven during times of crisis due to the currency’s stability.
Singapore topped the list for Apac investments in North America at 89%, with investments in the US and Canada hitting record levels. GIC was the largest investor, making notable moves such as an US$8.5 billion investment in US REIT Store Capital and a US$3.3 billion purchase of Canada’s Summit Income Industrial Reit. Other investors from the city-state included City Developments which made a US$468.2 million purchase of the St Katherine’s Dock estate in London.
Interestingly, Asian sovereign wealth funds made up 79% of Apac’s outbound investments in 1Q2023, with the retail and industrial sectors accounting for 45% and 40% of the investment volume respectively.
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In contrast, investment activity in Apac decreased by 53.6% y-o-y in 1Q2023. Singapore was the only exception that recorded higher investment volumes y-o-y, totalling US$4.3 billion, spurred by the sale of a portfolio of retail assets by Mercatus Co-Operative. Meanwhile, in Seoul investment activity hit its lowest level since 1Q2015 with a transaction volume of US$2.8 billion. Japan recorded a 17% y-o-y drop in investment volume, hitting US$9.4 billion in 1Q2023.
Neil Brookes, global head of capital markets at Knight Frank, is optimistic that asset repricing and confidence in stabilising debt costs will result in increased investor demand in Apac. He believes ultra-high-net-worth investors could play a pivotal role in capital deployment, in contrast to institutional buyers impacted by a higher cost of capital.