IOI Properties snaps up Shenton House for RM696mil

KUALA LUMPUR: IOI Properties Group Bhd has acquired full ownership of Singapore's Shenton House from its current owner, Shenton 101 Pte Ltd, for a price of RM696.43 million. Boulevard View Pte Ltd, a unit of IOI Properties, will buy 100 percent of Shenton 101 from Datuk Lee Yeow Seng, the group's chief executive officer and major shareholder, for just S$1 (RM3.21). However, IOI Properties will repay approximately S$217.06 million (RM696.43 million) that Lee had advanced to Shenton 101 as of July 31.

Shenton House, a 25-storey commercial building located in Singapore's central business district, is set to undergo a redevelopment project. The new development will feature 35-storeys of mixed-use spaces, including Grade-A offices, retail areas, and a 165-room luxury hotel. The projected net lettable area is 36,528 square metres, and the gross development value is estimated at S$1.61 billion (RM5.16 billion).

The redevelopment is anticipated to cost S$973.65 million (RM3.12 billion), encompassing construction costs, professional fees, financing costs, and land-related charges.

Construction of the new development is expected to commence in the first half of 2027 and conclude by the fourth quarter of 2031, contingent on regulatory approvals. IOI Properties anticipates that acquiring Shenton 101 will enable them to reap the benefits of Shenton House's future profits and potential value increase, which they currently do not enjoy despite managing the redevelopment project.

Additionally, Shenton House is conveniently situated in close proximity to IOI Properties' IOI Central Boulevard Towers and Asia Square Tower 2, allowing the company to expand its property portfolio in Singapore's Marina Bay area.

The acquisition comes after IOI Properties rejected Lee's earlier proposal to sell Shenton 101 to the company in August 2024. The company's stance has since changed, following the strong performance of IOI Central Boulevard Towers, which now boasts over 95 percent committed occupancy, and their expansion through the acquisitions of South Beach and Asia Square Tower 2.

The transaction will be financed using IOI Properties' internally generated funds, with its pro forma gearing increasing to 1.33 times from 1.29 times and net gearing rising to 1.10 times from 1.03 times. The acquisition is anticipated to be finalized in the fourth quarter of 2026, subject to various conditions, including approvals from lenders and regulators.

Lee and his brother, Lee Yeow Chor, a significant shareholder and director of IOI Properties, did not participate in the board's deliberations or vote on the transaction.