Key Takeaways
- • IOI Properties plans to launch a private real estate fund in Singapore within the next few months, backed by S$6 billion (US$4.69 billion) in assets, and has begun marketing it to investors, according to CEO Lee Yeow Seng.
- • The fund will hold Singapore assets including the South Beach complex and the IOI Central Boulevard Towers office building, with a targeted yield of at least 3.5%.
- • IOI Properties is targeting an early 2027 secondary listing on the Singapore Exchange (SGX) and has started discussions with the exchange, leveraging compliance work already done for its Bursa Malaysia primary listing.
- • The moves are part of a plan to cut net debt from 85% of equity at end-June to 30-50% over three to five years, after Singapore acquisitions pushed up borrowings.
- • IOI Properties now holds nearly S$12 billion in prime Singapore office space, making it one of the city-state's largest commercial landlords.
Summary
Malaysia-listed IOI Properties plans to launch a private real estate fund in Singapore in the coming months and is targeting an early 2027 secondary listing on the Singapore Exchange, according to CEO Lee Yeow Seng. Speaking on Tuesday at the launch of the listing prospectus for the group's Malaysia real estate investment trust, Lee said the SGX listing could take place as soon as next year and that discussions with the exchange have already begun. As quoted by The Edge Singapore, he said the process could be completed quickly because the group has already met many compliance requirements through its primary listing on Bursa Malaysia.
The planned private fund will comprise some of the group's Singapore assets, including the South Beach complex and the IOI Central Boulevard Towers office building. According to Lee, marketing has begun on the fund, which is backed by S$6 billion (US$4.69 billion) in assets. He said the fund is expected to deliver a yield of at least 3.5%, comparable to market rates for prime Grade-A office space in Singapore, as reported by The Edge Malaysia.
The initiatives are tied to a deleveraging objective. IOI Properties' net debt stood at 85% of equity at end-June, and the group aims to bring it to 30-50% over the next three to five years. Lee's multibillion-dollar bet on Singapore real estate has pushed up borrowings. Over the past year, the group bought out joint venture partner City Developments' majority stake in South Beach, acquired Asia Square Tower 2 from CapitaLand Integrated Commercial Trust, and agreed to purchase the company that owns the Shenton House building. Following these acquisitions, IOI Properties holds nearly S$12 billion in prime Singapore office space.
The group is also in exclusive talks to jointly acquire the One Raffles Place office complex, and to buy the historic CHIJMES complex and Capitol Kempinski hotel, according to Lee. He said IOI has grown its Singapore presence gradually since entering the market more than 30 years ago through smaller projects and joint ventures, adding, as quoted by The Star, "As we learn the trade and become more familiar with the market, we feel confident about venturing out on our own." Lee and his brother Lee Yeow Chor ranked third among Malaysia's richest people with a combined net worth of US$8.5 billion in April, according to Forbes; the family's business empire also includes palm oil interests.
The planned private fund will comprise some of the group's Singapore assets, including the South Beach complex and the IOI Central Boulevard Towers office building. According to Lee, marketing has begun on the fund, which is backed by S$6 billion (US$4.69 billion) in assets. He said the fund is expected to deliver a yield of at least 3.5%, comparable to market rates for prime Grade-A office space in Singapore, as reported by The Edge Malaysia.
The initiatives are tied to a deleveraging objective. IOI Properties' net debt stood at 85% of equity at end-June, and the group aims to bring it to 30-50% over the next three to five years. Lee's multibillion-dollar bet on Singapore real estate has pushed up borrowings. Over the past year, the group bought out joint venture partner City Developments' majority stake in South Beach, acquired Asia Square Tower 2 from CapitaLand Integrated Commercial Trust, and agreed to purchase the company that owns the Shenton House building. Following these acquisitions, IOI Properties holds nearly S$12 billion in prime Singapore office space.
The group is also in exclusive talks to jointly acquire the One Raffles Place office complex, and to buy the historic CHIJMES complex and Capitol Kempinski hotel, according to Lee. He said IOI has grown its Singapore presence gradually since entering the market more than 30 years ago through smaller projects and joint ventures, adding, as quoted by The Star, "As we learn the trade and become more familiar with the market, we feel confident about venturing out on our own." Lee and his brother Lee Yeow Chor ranked third among Malaysia's richest people with a combined net worth of US$8.5 billion in April, according to Forbes; the family's business empire also includes palm oil interests.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.