Malaysia’s IOI to take full ownership of $2 billion South Beach Singapore from CDL

Malaysian firm IOI Properties Group has agreed to buy a 50.1% stake in the mixed-use South Beach Singapore from the property’s joint-venture partner Singapore investment firm City Developments Limited.

When the deal is complete, IOI will own 100% of the property, which contains the 634-room JW Marriott Hotel Singapore South Beach. According to both companies, the deal values the the property at 2.75 billion Singapore dollars ($2.13 billion).

In a jointly released statement, CDL and IOI will execute the transaction via a share sale in the holding company Scottsdale Properties Pte. Ltd. The estimated sale consideration is 834.2 million Singapore dollars based on CDL's proportionate 50.1% share of the consolidated net assets as of April 30.

Since 2011, CDL and IOI together have owned the South Beach Singapore, which also contains office space, food-and-beverage outlets and residences.

IOI Properties said the deal is on a “100% interest basis, which represents an approximately 3% premium over the latest valuation of SG$2.67 billion as of Dec. 31.”

Lee Yeow Seng, IOI Properties’ CEO, called the Singapore South Beach an “iconic development."

“This development presented us with the opportunity to change the skyline of Singapore. … Combined with the IOI Central Boulevard Towers and W Singapore Marina View, this acquisition will elevate the group’s profile as one of the major landlords of premium office space and a prominent player in the hospitality industry within [Singapore],” he added.

CDL’s Group CEO Sherman Kwek added the partnership has successfully navigated macroeconomic challenges and transformed the South Beach Singapore into a high-performing, stabilized asset.

“It is now time to crystallize its value. This transaction gives a strong boost to CDL’s efforts to accelerate capital recycling so as to reduce gearing and redeploy capital,” Kwek said.

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