“The low yield environment in Asia continued to encourage investors to capitalise in markets offering higher potential returns,” said Ada Choi, senior director.
“We expect that the Asian outbound investment momentum will continue in 2016 as major players are still building up their global portfolios while other players are catching up.”
Singapore had the highest capital flight in the region, with a 58% year-on-year increase in outbound capital to $19.3bn, the research firm said. China followed with $17.6bn in outflows, up 41%.
The firm said outbound investment was driven by institutional investors in Singapore and China. There was a significant increase in deal size worth over $500m, up 167% year-on-year, and portfolio transactions, accounting for 28% of total Asian outbound investment turnover, up from 16% in 2014.
“While we see dominance of the four major capital sources, namely Singapore, China, Hong Kong and South Korea, there is more activity coming from other parts of Asia, such as Taiwan and Thailand,” Choi said. “There is also more Japanese interest on the global investment market but they may take indirect investment routes via funds.”
The recipients of outbound investment were more diversified in 2015 than the previous year.
“London, as the top destination of Asian investors, has contributed to a lower portion of outbound investment, decreasing from 17% in 2014 to 13% in 2015,” the firm said.
“Other major gateway cities such as New York, Sydney, Shanghai and Hong Kong have all received a higher proportion of Asian investments in 2015.”
The office sector remained the most-preferred asset class, but hotel and industrial assets continued to have strong appeal for Asian investors.
UK property returns have stayed positive the past year, outperforming the FTSE 100. London remains a top destination for Asian capital flowing into real estate, though it received a lower portion of investment in 2015 than in 2014.