Family offices in Singapore, elsewhere have ‘huge, sustained interest’ in real estate investments: report
Offices emerge as a top pick among property sectors
FAMILY offices in Singapore and Asia-Pacific (Apac) are eager to raise their real estate stakes despite macroeconomic uncertainty, according to a Knight Frank report.
“There is a huge, sustained interest in real estate investment from private capital, with 44 per cent of global family offices indicating they are looking to increase allocations to the sector,” said the report.
The report surveyed 150 family offices, with 51 per cent headquartered in Apac, as well as other regions such as Europe and the Americas. There was “strong representation” from Singapore, Hong Kong, London, New York and other major cities, the report found.
Real estate investment appetite is growing among family offices as the sector offers both growth and wealth preservation, the report added.
In the past 18 months alone, 28 per cent of family offices ramped up their real estate allocations, while only 17 per cent reduced theirs, according to the report. Some 44 per cent are looking to expand real estate exposure in the next 18 months despite macroeconomic concerns, and only 10 per cent intend to lower theirs.
Just last year in Singapore, family offices made big ticket acquisitions that were traditionally hunting grounds of institutional players and developers, said Galven Tan, chief executive officer of Knight Frank Singapore.
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“Wealthy families have been pursuing properties in Singapore, for purposes that range from capital gain, the generation of recurring income, to value-add and for capital preservation,” he said. He highlighted that the number of single-family offices in Singapore is on the rise, having grown from 400 to 2,000 between 2020 and 2024.
In terms of motivation, growth and capital appreciation was the top objective for investing in real estate as 42.1 per cent of family offices cited this as their preferred motive. This was followed by wealth preservation, which 22.5 per cent named, and income generation, cited by 18.5 per cent.
Real estate’s popular picks
In terms of current allocations, offices emerged as a top pick among real estate sectors, followed by the luxury and residential sector, industrials and hotels.
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Christine Li, head of research for Apac at Knight Frank, said: “In Asia... family offices are increasingly diversifying into high-growth sectors like data centres and living sector-related real estate. (This) indicates a shift toward higher-risk, higher-reward investments, away from the traditional core and core-plus strategies, reflecting a desire to capitalise on the recent market dislocations due to higher interest rate environment.”
Among sectors that are in-demand, the living sector led the pack. It was trailed by the industrial and logistics sector, the luxury residential and branded residences sector, hotels, healthcare and data centres.
Apac family offices show a strong preference for domestic real estate, the report found.
Some 70 per cent focus their portfolios locally, with most of these domestically oriented family offices based in New Zealand and Australia.
Hong Kong and Singapore family offices have more geographically diversified portfolios that target both regional and international opportunities.
Medium to long-term investment for most
Most family offices viewed real estate investments with a medium to long-term time horizon and a minority considered them to be short-term investments.
The majority of real estate investments are made with a time horizon of six years and more. Of these, the largest share of investments – at 37.3 per cent – was made with an outlook of nine years and longer, while 28.2 per cent of investments were made with a six to nine-year outlook.
Some 31.8 per cent of investments were made with a three to six-year outlook, and 2.7 per cent were made with an outlook of three years and less.
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