BlackRock is seeing increased interest from investors looking to invest in real estate markets across the Asia Pacific region, particularly those with high liquidity, according to Hamish MacDonald, head and chief investment officer for APAC Real Estate at BlackRock. The company believes that the sectors set to benefit from economic tailwinds this year include accommodation, logistics, and alternative assets. Macdonald also notes that the countries with the greatest amount of liquidity this year are Australia, Japan, Singapore, and Auckland in New Zealand, which aligns with BlackRock’s focus for this year.
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When it comes to investing in property in Singapore, foreign investors must have a thorough understanding of the regulations and restrictions that apply. In comparison to landed properties, foreigners face less restrictions when purchasing condos. However, there is an Additional Buyer’s Stamp Duty (ABSD) of 20% that they must pay on their first property purchase. Despite this additional cost, the reliable stability and potential growth of the Singapore real estate market remain highly appealing to foreign investors. For the latest updates on new condo launches, visit New Condo Launches.
In Singapore, BlackRock has recently focused on acquiring serviced apartment properties, teaming up with YTL Corp in October 2023 to purchase Citadines Raffles Place for $290 million, and partnering with Hong Kong-based accommodation operator Weave Living to buy Citadines Mount Sophia for $148 million in February 2024. MacDonald believes that there is a shortage of new serviced apartment supply in Singapore, but a high demand for this type of accommodation. However, the company’s focus is not on building an aggregated portfolio, but rather on acquiring properties and working with a partner to refurbish and add value to them.
The influx of capital and high-skilled labor in Singapore is driving strong business growth, making it an attractive market for real estate investors. BlackRock remains optimistic about opportunities in Singapore, but Japan is also a key target for the company this year. According to MacDonald, BlackRock is bullish on the Japanese economy, and they see potential growth in real estate due to factors such as domestic pricing power, wage growth, and corporate reform. Daigo Hirai, head of Japan real estate at BlackRock APAC, adds that a combination of factors is contributing to rental increases in the Japanese residential market, with an expected 7% to 8% increase in rents across major cities like Tokyo and Osaka this year.
BlackRock is also looking to partner with an experienced operator to manage a hybrid residential investment strategy that caters to both inbound tourist accommodation and domestic rental demand in tourist-dominated cities like Kyoto and Fukuoka. In Australia, Ben Hickey, Head of Australia Real Estate at BlackRock, says that long-term population growth estimates support positive long-term growth across most sectors. The company is focusing on niche asset classes in Australia, including childcare properties, last-mile logistics assets, life science real estate, and self-storage properties, as they are “chronically undersupplied” and have the potential to generate outsized returns with limited risk.