In the first quarter of 2024, Singapore attracted the highest proportion of cross-border investments in the Asia-Pacific region, despite an overall decline in such activities. According to Knight Frank’s APAC research, the Republic received 45.6% of overseas capital among APAC markets, highlighting its resilience as an investment hub.

The surge in interest from institutional investors, particularly in the hospitality sector, significantly contributed to this trend. These investors accounted for six of the eleven buyers in Singapore, leading to a total of US$906 million in transactions. The renewed momentum in the tourism industry has been a key driver, with increased acquisition activity in hospitality assets. Factors such as the growing demand from the meetings, incentives, conventions, and exhibitions sector, along with the China-Singapore mutual visa exemption, have bolstered tourism and, consequently, investment interest.

Christine Li, Head of Research for APAC at Knight Frank, noted a 29% quarterly decline in cross-border activities across the region. However, Singapore’s unique position indicates a ripe market for further investment, particularly in value-added opportunities. Li emphasized the importance of strategic partnerships between investors and developers to enhance existing assets and unlock value through repositioning.

While Singapore thrived, other APAC nations like South Korea and Japan also saw renewed interest in commercial investments, particularly in the office sector. South Korea experienced a 12.5% quarterly increase in investment volume, reaching US$5.8 billion, with office deals constituting 64.7% of this total. The hospitality sector in South Korea also saw significant institutional investment, amounting to US$850 million—a remarkable 234.7% increase from the previous quarter.

In Japan, while the overall real estate investment volume contracted, office transactions doubled from the previous quarter, accounting for nearly half of total investment volume. Knight Frank’s research indicated that positive momentum in the office sector, driven by consistent occupier demand, has motivated investors.

Neil Brookes, Global Head of Capital Markets at Knight Frank, cautioned that while the domestic institutional investor presence in South Korea is re-emerging, foreign investors remain cautious, awaiting price adjustments before actively pursuing transactions. He noted that discrepancies in pricing expectations might delay deal closures and slow market activities until improvements in interest rates and liquidity become apparent.

Overall, the fluctuation in currency values, particularly the yen, could encourage cross-border investments in the region. Brookes highlighted that strategic investment approaches and partnerships will be essential for capitalizing on emerging market opportunities in the APAC real estate landscape.