Hotel, retail assets seen leading this year’s real estate investments

Dealmaking to boom in the second half.

Property deals in Singapore are projected to grow by as much as 16 percent this year as the ongoing rebound in tourism spurs dealmaking in the hotel and retail sectors, according to Knight Frank.

Knight Frank estimated the total real estate investment sales to reach between $23b and $25b for the entire 2024, higher than the actual $21.5b recorded last year.

It said hotels and retail assets are likely to garner attention from investors as the volume of tourist arrivals continues to bounce back from pre-COVID levels.

Daniel Ding, capital markets head of the property agency, expects dealmaking to stay muted in the first half before picking up in the second half of the year in anticipation of interest rate cuts.

The firm’s data showed the volume of assets that changed hands in the first quarter plunged by more than a quarter to $4.3b from $5.8b in the fourth quarter of 2023. Year-on-year, this was 4.4% lower than the $4.5b booked in the same three-month period last year.
 
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Meanwhile, commercial shophouses that do not carry an Additional Buyer's Stamp Duty should remain popular among investors due to their rarity, while stabilised industrial properties will attract investors looking to ride the recovery of the manufacturing industry.

“Collective sales will continue to be challenging, with success factors hinged on favourable site locations with attractive development parameters, and a reasonable price tag,” the report stated.