What happens when an immovable assets (e.g. HDB) is inherited by 2 or more beneficiaries? Does the Executor have to liquidate the asset before distributing?

Executors typically are given a range of powers, which may include liquidating the parts of the Estate before distributing.

HOWEVER, for the ease of convenience [ and partially to avoid any conflict between the Executor and the Beneficiary(ies) ], unless otherwise specified by the Testator, usually the Executor distributes the immovable asset "as it is" to the beneficiaries.

If you want the Executor to liquidate the asset before distributing, check out how in this article.

What happens after will be for the beneficiaries "to sort it out". So if the HDB gets split 40 / 60 to the son and daughter, they will own 40 / 60 of the said HDB accordingly.

For Singapore HDB in particular, there are other intricacies involved which you can find out more from this article.

If it is an antique watch though, it will still be according to whatever percentages, just that how owning a share of a watch works will be for the beneficiaries to work it out.

Splitting immovable assets have it's downsides;

What if one wants to sell it while the other wants to keep it?
For HDB, what if one cannot keep it?
If both wants to keep it, how do they share it? Time-share?

This, amongst many other issues which is precisely why it's better to consult with your Certified Estate Planner.