Tuesday, October 11, 2011

Published October 6, 2011
Singapore ranks high on property investment listIt is 9th in a field of 25, at US$10.8b; leaders are New York and London


(SINGAPORE) Gateway Asian cities feature prominently in Cushman & Wakefield's report on the biggest and fastest-growing cities in real estate investment for the year ended the third quarter of 2011.

Singapore came in ninth in the list of top 25 cities that attracted the most capital into real estate, comprising office, retail, industrial, hotel and serviced apartment properties but excluding development sites.

The island republic drew US$10.8 billion of investment in the 12 months to Q3 2011, up 87.2 per cent year on year.

New York City (US$29.7 billion) nudged ahead of London (US$27.2 billion) into first place.

However, London topped the global ranking for attracting foreign property investment with US$14.2 billion invested in the year to Q3 2011. The figure was down 9.6 per cent year on year.

This was followed by Paris and New York. Singapore was in fourth position, with US$3.9 billion of investments. The figure was up 63.4 per cent year on year. Beijing and Nanjing were in fifth and sixth positions.

'With economic uncertainty and financial risks both impacting further on sentiment in recent months, momentum has slowed in the market, but supply levels are up in some markets, notably of late London, and strong activity is expected to be maintained, albeit with deals taking longer to close as due diligence remains high,' said the report, Winning In Growth Cities 2011/2012.

The cities experiencing the highest growth in investment volumes include Singapore (No 7) and Seoul (No 9). Chicago, New York and Boston were the top three.

London emerged as the top city for global office property investment with US$18.9 billion of deals, followed by New York (US$14.1 billion) and Paris (US$12.5 billion) and Tokyo (US$11.5 billion). Seoul, Hong Kong, Shanghai and Singapore were in sixth, seventh, 10th and 11th positions respectively.

For industrial property investments, Singapore was top with US$3.65 billion in the year to Q3 2011, up 345 per cent year on year. Los Angeles was second with US$2.81 billion, followed by Hong Kong (US$1.76 billion).

Hong Kong led the field for retail investment up to end-Q3 this year with US$6.99 billion, boosted by the HK$18.8 billion (S$3.2 billion) sale of Festival Walk in Kowloon Tong by Swire Properties to Singapore's Mapletree Investments.

The Rhine-Ruhr metropolitan area in Germany and New York were in second and third places, followed by Manchester and London.

In the hotel sector, Singapore was in eighth position with US$1.3 billion of deals. Six of the world's top 10 locations for hotel investments over the 12 months to Q3 2011 were in the United States, led by New York (US$4.2 billion).

Cushman & Wakefield managing director of capital markets (Asia Pacific) John Stinson said: 'The lion's share of the global appetite for development sites up to Q3 2011 was taken up by Asia, which dominated the entire top 25 field.'

Beijing was top with US$24.5 billion of investments in all property development sites, followed by Shanghai (US$13.7 billion), Dalian (US$11.5 billion), Wuhan (US$11.3 billion) and Suzhou (US$10.7 billion).
Singapore was sixth with US$10.4 billion of development sites sold; Hong Kong was seventh (US$9.4 billion) and Tokyo was ranked 21st. Except for these three, the rest of the top 25 cities for development site investment deals are in mainland China.

'While investors are still keen to acquire development sites, overall volumes are now easing as policy tightening in China aimed at reducing the risk of overheating in the residential sector in particular, leads to lower levels of activity,' said the report.

'Economic factors alone do not make up a great global city. Transport, education, liveability and ease of doing business all become important differentiating factors as gateway cities around the globe compete for the investment dollar. Asia again figures strongly considering these often ignored parameters.

Said Mr Stinson: 'Singapore is the No 1 port in the world for container throughput, closely followed by another five cities all based in Asia - Shanghai, Hong Kong, Shenzhen, Busan and Guangzhou. Singapore ranks No 4 globally as a financial centre.

'On the human side, Singapore ranks No 1 for personal safety in top global tourist locations.

'There is no doubt that economic, social fabric and culture (goals) combined with investor sentiment place many Asian cities in the top global ranking with Singapore winning gold in many surveys.'


My Thots.....

Many No 1s.... many top rankings....
 Flow of foreign investments into Sg assets means higher asset prices; there are "plus and minus" arising from this.
Policymakers have a tough job balancing those "plus and minus" - the concomitant inflow of foreigners, accentuation of the wealth gap, rising costs...
But, Sg cannot go back, RoA (rest of Asia) is developing and our niche is in continuing with policies that enhance the "global city" qualities of Sg.

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