The cross border investments traditional safe havens in the region have always been Japan and Australia but as a result of available prime assets dwindling supply, potential investors had been pushed to look elsewhere for good investment opportunities. As such Singapore and Hong Kong inevitably become alternative choices for safe havens providing worthwhile havens for funds coming from these investors with both Singapore and Hong Kong accounted for three deals of largest investment scale and at the same time, both Japan and Australia experienced year to year decrease in transactions over the commercial real estate. How does this advantage influence the supply and demand for new launch condo, new commercial launch, new industrial properties and new condominium in the near future?
As any interest rates hike by the US Federal Reserve has been delayed indefinitely, this indeed has worked out in favour of prime properties in countries having their currencies pegged resulting in debt remain cheap over an extended period of time. Both Singapore and Hong Kong have similar fiscal policy which have their currencies pegged. Japan, on the other hand, enforced negative interest rates by it central bank, Bank of Tokyo. This has made the properties in Japan being priced much higher as it failed to contain the Japanese Yen appreciation.
The acquisition of Asia Square Tower 1 in Singapore by Qatar Investment Authority has been the talk of the town with its transaction being one of the largest, if not the largest at USD2.5 billion equivalent to SGD3.4 billion from BlackRock which surpasses the record for the largest Asia Pacific deal. Trailing behind the Asia Square Tower 1 as the second largest transaction is the sales and lease back of Chinese Estates’ Interest in the Mass Mutual Tower to Evergrande which was done at USD1.6 million equivalent to HKD12.5 billion. The third largest transaction is the acquisition of Dah Sing Financial Centre by China Everbright at USD1.3 billion equivalent to HKD10 billion. These are the new commercial transaction on records so far.