In gauging investor sentiments towards commercial real estate, the survey discovered a keenness for serviced residences, hotels, co-working or flexible offices, retirement homes and data centres.

In the next two to three years, investors’ risk appetites for alternative investments are expected to improve due to the need to build resilience in their real estate portfolios amidst the nation’s post-pandemic recovery.

“Respondents are confident that the logistics and industrial sub-sectors will be the quickest to recover within the next twelve months, along with the healthcare sub-sector,” said Amy Wong, Knight Frank executive director of research and consultancy.

The survey also revealed that 76% of respondents expected the industrial and logistics sub-sectors to enjoy capital value appreciation this year, while at least 57% saw the possibility of capital values rising as well in the healthcare sub-sector. Yields were also expected to rise in all three sub-sectors.

In a statement, the property consultancy revealed that rental returns in the logistics and industrial sub-sectors are expected to rise, underpinned by strong demand for space as logistics and supply chain management emerges as a business priority.

However, it foresees a reduction in returns for occupied office space due to ongoing pressure on occupancy and rental rates as supply continues to outpace demand.

“The traditional sub-sectors of hotel or leisure, office and retail are seen by respondents as a long-term play,” Wong added.

Meanwhile, group managing director Sarkunan Subramaniam added that the growing awareness and adoption of environmental, social and corporate governance frameworks in the real estate industry will help drive the value of sustainable real estate into the future.