Singapore is investing in Australia
Australia properties are not just of interest to Chinese investors but also to Singaporeans. The country just took the lead position on the real estate market for Singaporean companies in 2015.
According to a report from Business Times, Australia is becoming more appealing to Singaporean corporates as compared to more mature markets like Tokyo, Paris, Singapore and New York. There are also the sustained yield differentials to consider.
Furthermore, the report also said that Singaporean companies have spent as much as US$1.85 billion in Australian real estate in 2015 despite the observed slowdown in their local market. This emphasises how valuable Australian properties are appearing to Singaporean investors. UK, China, Malaysia and South Korea follow after.
HSBC Australia head of commercial banking James Hogan also told the press that based on JLL data covering real estate investments like hotels, retail, residential, industrial and offices, Australia should see the trend to continue. Capitals from other countries are pouring into the Australian real estate market thanks to weaker currency and falling borrowing rates.
“Australia is becoming a place of choice for Singaporean companies looking at commercial real estate,” explained Steven Cranwell, head of commercial banking at HSBC Singapore.
Specifically, Hogan added that office spaces in Melbourne and Sydney remain attractive to overseas investors as opposed to those found in competing markets. There is a considerable difference between comparable assets in New York and Australia.
However, the same may not be happening for Australian investors to Singaporean real estate. The former only invested US$192 million into Singapore real estate as noted by JLL’s date for September 30, 2015. Financing options has also helped support the pouring of investments. Some of these include conventional financing for overseas acquisitions, bond issuances and equity raising.
“While onshore financing in Australia is still the preferred solution, in some cases we see corporates considering vanilla and/or project bond issuances as alternative financing solutions,” explained Cranwell.
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