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According to Knight Frank's latest market report, the total value of bulk transactions in Singapore's residential and commercial real estate sectors reached SGD 6.4 billion in Q2 2024, marking a 41.2% quarter-on-quarter increase and a substantial 63.3% year-on-year growth. This surge is primarily attributed to a significant rebound in bulk residential transactions, with the total transaction value skyrocketing from SGD 2.1 billion in the previous quarter to SGD 4.2 billion, effectively doubling. The commercial real estate sector also saw a notable rise, with bulk transaction value increasing by 21.1% quarter-on-quarter to reach SGD 1.8 billion, largely driven by high-value deals for major commercial buildings such as Mapletree Anson and Delfi Orchard.

Conversely, the industrial real estate sector experienced a slowdown, with bulk transaction value decreasing by 24.8% quarter-on-quarter and 67.2% year-on-year, down to SGD 330 million. Knight Frank's analysis suggests that the high Additional Buyer's Stamp Duty (ABSD) has impacted the appeal for foreign investors and high-net-worth families, diminishing their interest in residential real estate. Instead, historically significant shophouses have become their new investment focus, aiming for capital appreciation through these properties.

In the collective sales market, six projects were launched in the second quarter, one more than in the previous quarter. However, the gap in price expectations between owners and developers, coupled with the doubled ABSD for foreigners increasing the cost of purchasing replacement properties, has led to cautious attitudes towards selling. This makes successful collective sales of residential projects more challenging in the current market.

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Despite these hurdles, investors remain undeterred, closely monitoring market dynamics and preparing to initiate acquisitions swiftly once interest rates decline and global economic tensions ease. Meanwhile, real estate groups and asset management companies are actively expanding their investment portfolios, particularly acquiring purpose-built student accommodation (PBSA) in primary markets. This asset class has shown robust market resilience amid generally weak valuations in other asset types.

Knight Frank anticipates that with the gradual recovery of tourism, the hotel and retail sectors will emerge as the most promising investment areas. A significant number of transactions are expected to be completed once there are signs of interest rate cuts. Additionally, demand from landed property buyers remains strong, and prime-location landed redevelopment sites will continue to attract boutique developers. If interest rates decrease, the expectation gap between buyers and sellers is likely to narrow, facilitating bulk transactions in the second half of the year and potentially reaching an annual total transaction value in the range of SGD 23 billion to SGD 25 billion.

During this period, the collective sales market will continue to face challenges, particularly concerning price expectations and policy changes. However, as market conditions improve and investor confidence returns, more successful collective sale transactions are expected in the coming quarters. Real estate developers and investors will keep seeking promising locations and projects to achieve higher returns when market conditions improve.

In summary, although the bulk real estate market in Singapore faced challenges in the first half of the year, the recovery signs in the second quarter are encouraging. With the potential implementation of interest rate cuts and improvements in global economic conditions, market activity is expected to increase further in the second half of the year. Whether in residential or commercial real estate, investors should closely monitor market dynamics to seize upcoming investment opportunities.