In Focus
MARKETS & INVESTING | Staff Reporter, Singapore

Singapore is the top expansion hotspot for Mainland firms

It was recognised for its "semi-transparent" real estate market.

Singapore is the top destination for firms from Mainland China expanding overseas, JLL revealed in its report "China12: China's Cities Go Global." It landed amongst the top cities that "possess the greatest linkages with China’s leading cities, as measured by a blend of capital flows, corporate presence, infrastructure investment, trade movements and flows of people (students, tourists and residents)," JLL said.

Tokyo and Seoul – come in at close second and fifth places respectively, demonstrating "China's appetite for the world's leading gateways and financial centres," JLL added, "Jakarta (6th) and Bangkok (10th) are major beneficiaries of Chinese companies' expansions into Southeast Asia, and Delhi (13th) is a key target as Chinese corporates seek to tap into India's vast population of over a billion."

Singapore ranked ninth in terms of real estate investment and its market fell into the semi-transparent category. JLL noted that it is the second largest global cross-border transactions related to direct commercial real estate at nearly US$16b, trailing behind Mainland China's US$30b (9% of total).

Singapore is also the ninth city to receive the most real estate investment from Mainland China, reaching US$0.9b and comprising 15% of the lion city's total. It is also the top third city with the most land purchases made by Mainland Chinese buyers from 2013 to 2017 at US$2.5b; Sydney has US$4b, whilst New York has US$2.7b. 

Meanwhile, the island nation is first in terms of corporate footprint. JLL Singapore research and consultancy head Tay Huey Ying explained, "Not only is it Asia's most stable and transparent market and a global financial services hub, Singapore also carries strong links to China and is geographically well-placed to act as a gateway into Southeast Asia."

The report said that so far, Singapore and Silicon Valley are the top destinations for China’s technology companies.

JLL added that the effects of Belt and Road Initiative (BRI) activities on real estate are likely to be felt most in semi-transparent markets such as Nairobi and Jakarta. "Global financial centres – Hong Kong, London, New York and Singapore – will also benefit from growing demand for their broad-ranging expertise in financial and professional services to support the BRI roll-out," it said.

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