Ravi Chandran
Singaporean groups have been the most active offshore investors in the Australian office market in 2019, as attractive yields and a relatively low dollar draw record volumes of capital to Australia.
Singaporean investors accounted for 30 percent of all offshore purchases in Australia in the year to October, amounting to AU$3.07 billion – the second highest year on record.
The data, from JLL and Real Capital Analytics, relates to transactions over AU$10 million.
Australia presents an attractive option, says Stuart McCann, Head of International Capital – Australia, JLL,
“Singaporean REITs have shifted from share buy-backs and company mergers and acquisitions, to active capital raising. This is off the back of low bond yields and a run on share prices, which has helped reduce their cost of capital to competitive levels in Australia,” he says.
Over the past two years, Singapore has itself witnessed an influx of capital, further driving domestic investors overseas in search of value amid growing competition at home.
But it’s not just Singaporeans looking to Australia. Overseas capital accounted for a record AU$10.25 billion of office, retail and industrial purchases in the year to October.
Singapore, the United States, Hong Kong and Canada make up the bulk of offshore investment into Australia.
While demand for real estate globally is unprecedented, deployment is increasingly challenging; global dry powder stands at a record US$330 billion.
Record low bond yields, as well as debt costs is resulting in Australian office market offering the highest cash-on-cash yields of any of the core and mature gateway office markets in Asia Pacific,” says McCann.
Forecast rental growth, strong liquidity and market transparency makes Australian office market attractive
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Australian office market have accounted for 66 percent of all overseas purchases in Australia over the year.
Forecast rental growth, plus strong liquidity and transparency in the Australian office market, makes the sector attractive, says Camilla Bradley, Director – International Capital, JLL.
“We’ve seen low vacancy rates and supply, particularly in Sydney and Melbourne, driving rental growth, with investors looking to place their capital directly, as well as through local managers,” she says. “We expect this demand to continue with yields remaining attractive relative to other global cities. The weight of capital in the market, favourable hedging costs, a lower cost of debt, as well as an outlook for low Australian Dollar, will contribute to further rate compression and increased investment levels in the sector.
Singapore buyers in the Australian Office Market
The demand from Singapore is unlikely to let up as we look to 2020, says McCann.
“Major developers and corporations, as well as government-linked corporations, and REITs are all expected to be active in Australia in the next 12 months.”
Singaporean sovereign wealth fund GIC has been public about its ongoing commitment to add quality long-term product to Australia.
It was recently involved in one of the year’s biggest deals with the acquisition of a 25.1 percent stake in the waterfront office precinct, Barangaroo, in Sydney, from Australia’s Lendlease and Canada’s CPPIB. The purchase was on the back of GIC’s sale of a 49.9 percent stake in Sydney’s iconic Chifley Tower for AU$920 million.
Mr Paul Ho, chief mortgage officer at iCompareLoan, said, “If you are you planning to invest in properties in Australia but ensure of funds availability for purchase, you should talk to a trusted mortgage broker. These real estate financing professionals can set you up on a path that can get you a home loan in a quick and seamless manner. They are experts who do the work for you for free, while you lean back, rest and rely on our professionalism at absolutely no cost to you.”
Mortgage brokers have close links with the best lenders in town and can help you compare Singapore home loans and settle for a package that best suits your home purchase needs.
Whether you are looking for a new home loan or to refinance, the Mortgage broker can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the best home loans in Australia. And the good thing is that all their services are free of charge. So it’s all worth it to secure a loan through them.
Options for those that want to buy properties from the residential market in Australia includes a non-exclusive, non-binding arrangement with HSBC in Singapore, to assist with local refinance options, subject to the latter’s loan application process, credit criteria and relevant terms and conditions.
TALK TO A LOAN CONSULTANT ABOUT REFINANCING YOUR AUSTRALIAN PROPERTY WITH HSBC
Whether you are looking to invest or refinance your Australian property, you can now seamlessly finance it locally with the new HSBC International Mortgage. Exclusively for residential properties in Adelaide, Brisbane, Perth, Melbourne and Sydney, you can enjoy:
- Option of AUD or SGD financing
- Loan tenor of up to 30 years
- Loan amount of up to 70% (for AUD loan) and 60% (for SGD loan) of purchase price or property value, whichever is lower
TALK TO A LOAN CONSULTANT ABOUT REFINANCING YOUR AUSTRALIAN PROPERTY WITH HSBC
Exclusive promotional interest rate
As HSBC’s valued customer, you will be offered an exclusive promotional interest rates when you take up an International Mortgage (for Australian property only) with HSBC.
| Loan | Interest Rate |
| SGD Loan | 3M SIBOR# + 2.28% throughout loan tenor (indicative 4.22% as at 7 May 2019) |
| AUD Loan | 1M AUD VLR+ + 2.18% throughout loan tenor (indicative 3.78% as at 7 May 2019) |
Eligibility:
- Singapore Citizens / Permanent Residents or Foreigners (Employment Pass holders) residing in Singapore
- Minimum loan size of $200,000 (AUD/SGD)
The minimum income to qualify for this International Mortgage for Australian property is $180,000 per annum. HSBC can provide such loans for foreigners residing in Singapore, whereas other banks cannot. Its Australian dollar loan rate is below 4% – one of the best any lender can provide. But refinance can only be done Singapore dollar to Singapore dollar or Australian dollar to Australian dollar.
