Malaysian billionaire brothers’ IOI Properties to buy Singapore commercial property for $1.95B

CICT, Singapore’s largest real estate investment trust, on Monday said it has agreed to divest the 773,000 square-feet (71,814-square-meter) property, which houses office, hotel, and retail space, at a 9.9% premium to its market valuation of about S$2.25 billion as of the end of last year.

An announcement by IOI Properties, meanwhile, said the agreed price reflects a S$50 million discount to an independent valuation dated April 13 by consultancy Savills.

The transaction, expected to be completed in the second half of this year, is structured through a put-and-call option agreement between the trustee of CapitaLand Commercial Trust, a wholly owned sub-trust of CICT, and IOI Marina View, a fully owned unit of IOI Properties.

CICT said in a filing cited by The Edge Singapore that the development “has consistently delivered healthy and stable operating performance, and has reached a mature phase in its property cycle, marking an opportune time to monetise the asset and crystallise value for unitholders.”

Separately, the trust said proceeds from the sale will be used to partially fund its S$3.9 billion acquisition of Paragon, a luxury shopping mall along Singapore’s Orchard Road, Bloomberg reported.

IOI Properties is part of a business empire that also has interests in palm oil and is controlled by brothers Lee Yeow Chor and Lee Yeow Seng, who ranked third with a combined net worth of US$8.5 billion on Forbes’ Malaysia rich list published last week.

Billionaires Lee Yeow Chor (L) and Lee Yeow Seng. Photo from IOI Properties Group’s website

The developer holds a sizeable portfolio in Malaysia and has been steadily growing its presence in Singapore, where the Lee brothers are among the largest landlords. Among its key assets in the city-state is the IOI Central Boulevard Towers office development, also in the Marina Bay area.

Last September, it acquired a roughly 50% stake it did not already own in the South Beach mixed-use complex from billionaire Kwek Leng Beng’s City Developments for around US$650 million, as reported by The Business Times.

Shares of IOI Properties have been rising amid the siblings’ plan to launch a REIT in Malaysia and another in Singapore between this year and next. The combined value of assets under the proposed REITs is reportedly around US$8 billion.