How much have Asian investors spent on overseas properties in 2023?

Cross-border real estate deals were dominated by investors from Singapore, Japan, and Hong Kong.

According to a recent article from Savills, Asia has become a major source of capital for real estate in other regions, with investors from this region spending $48.1 billion on properties overseas.

Data from MSCI shows that Singapore, Hong Kong and Japan were amongst the top five sources of cross-border real estate capital for 2023, with Singapore second-placed behind the US.

Simon Smith, Head of Asia Pacific Research and Consultancy at Savills, says: “The data demonstrates how powerful Asian investors have become on the global stage, investing nearly $20 billion into the US and Canada and more than $5 billion into Europe.

“Asia was relatively strong in a year where US and European investors pulled back due to troubles in their home market, nonetheless the growth of private wealth and institutional capital across this region means it will continue to export capital.”

Here’s more from Savills:

Singaporean investors spent a total of $25.3 billion overseas, per capita this was more than 40 times the amount spent by US investors, demonstrating the city-state’s outsized financial influence.

Japan invested $8.1 billion of capital in foreign real estate in 2023, a rise of 170%. Big players such as Mitsubishi Estate, Mori Trust and giant pension fund GPIF dominated outbound investment. The top five Japanese firms investing overseas accounted for more than half the total.

Investors from Japan invested heavily in the US, but also invested significantly in the Asia Pacific region, with Australia and Indonesia being their top markets. They invested in a broad range of sectors, from New York offices to Australian rental residential. The biggest deal of the year was Mori Trust’s acquisition of a 49.9% stake in 245 Park Avenue, a New York office tower, for just under $1 billion.

“Less competition from domestic investors will have helped Asian investors in North America and Europe,” says Smith. “Furthermore, Asia’s largest investors have strong international businesses all over the world.”

Hong Kong investors spent $8.4 billion overseas, including a substantial proportion allocated to projects in China, which was the sixth most popular destination for overseas capital. However, Chinese investors spent little outside their home market last year.

Tokyo, Singapore and Hong Kong were also in the top 10 destinations for overseas real estate capital. However, US investors accounted for most of the spending in Tokyo, while in Singapore and Hong Kong it was Asian investors.

MSCI also reported a shift to industrial and retail properties worldwide, at the expense of office investments. Smith says: “Industrial continues to benefit from structural tailwinds, while many investors believe retail has bottomed out after a difficult few years.

“Office properties have fallen out of favour due to hybrid and home working but deals like 245 Park Avenue demonstrate that some investors believe in prime assets in gateway cities.”