14 April 2016

Tapping growth between Singapore and Australia

By James Hogan, Head of Commercial Banking for Australia and Steven Cranwell, Head of Commercial Banking in Singapore.

Singapore and Australia already boast a well-developed bilateral partnership across trade, investment, tourism and education. With the formation of milestone developments like the Trans-Pacific Partnership and ASEAN Economic Community, the relationship is expected to further blossom.

Singaporean corporates flocking to Australian commercial property

For years, Singapore has invested in large-scale Australian commercial property assets, making Australia the top real estate destination for Singaporean capital.

In 2015, Singaporean investors contributed $1.845 billion to Australian commercial property, and HSBC’s Commercial Banking heads in both countries feel we’re only scratching the surface of this emerging corridor.

James Hogan, Head of Commercial Banking for Australia believes the strategic importance of the Australia-Singapore business corridor cannot be overstated.

"Singaporean investors – ranging from family offices to institutional investors – have long been attracted to Australia’s stable, transparent and well-regulated property market. Today, we’re seeing an interesting shift away from traditional property assets like residential and office space towards student accommodation and hotels."

Hogan believes Singaporean investors’ appetite for Australian property is moving in lockstep with the Australian economy.

"The next era of Australia’s economic prosperity is linked to the services sector. We’re seeing consumers from Asia educating their children in Sydney and visiting Melbourne for a holiday. So it makes perfect sense that our Singaporean clients are ahead of the curve and investing in assets that directly support this long-term trend," he said.

Singapore stacks up

According to Steven Cranwell, Head of Commercial Banking in Singapore, the story isn’t purely outbound. Australia accounted for around a third of Singapore’s inbound commercial real estate capital in 2015.

"Singapore is an international financial centre and business hub, providing access and opportunities for Australian companies seeking exposure to other countries in the ASEAN bloc," Cranwell said.

"The commercial real estate trends we’re seeing today are just the tip of the iceberg. From a Singaporean perspective, we see opportunities to re-ignite inbound investment into Singapore, as the market has strong underlying fundamentals including a government land sale programme and an investment-friendly environment with few restrictions on foreign ownership in commercial property."

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