IOI Properties’ Lee Yeow Seng snaps up Shenton House for S$538 million

Citi Commercial Pte Ltd

SHENTON House, located in Singapore’s Central Business District, has been successfully sold for S$538 million, said sole marketing agent JLL on Wednesday (Nov 1).

The building was relaunched for public tender in October.

The buyer is Shenton 101 Pte Ltd, a company owned by Lee Yeow Seng, group chief executive officer of IOI Properties Group (IOIPG), which is listed on Bursa Malaysia Securities. 

Lee told The Business Times that he went for the bid in his personal capacity rather than the listed IOIPG, due to the size of the subject acquisition as well as the tight timeline set by the collective sales committee (CSC).

“As IOIPG already has a substantial presence in the Marina Bay area via its presence in its IOI Central Boulevard Towers, W Marina Bay and Marina View Residences, the (acquisition) and redevelopment of Shenton House are both timely and synergistic to IOIPG’s presence in Marina Bay,” he said. 

IOIPG’s core business comprises property development, property investments and hospitality and leisure across Malaysia, Singapore and Xiamen, China.

With over half a million square feet (sq ft) of gross floor area (GFA) for the Shenton House site, Lee plans to “develop this strategically located and very prominent site” into a Grade A office with luxury branded serviced residences. 

“This purchase demonstrates my continued confidence in Singapore’s prime office sector and residential rental market,” Lee added. 

The site is eligible for 25 per cent bonus GFA under the CBD Incentive Scheme (CBDIS) where it can be redeveloped into mixed-use commercial with residential commercial or a hotel at the gross plot ratio of 14, said JLL.

The 99-year leasehold development sits along Shenton Way, spanning 36,250 sq ft zoned for commercial use. The site has a plot ratio of 11.2 under the Urban Redevelopment Authority’s Master Plan 2019.

At the reserve price of S$538 million, and accounting for an estimated land betterment charge of S$174 million with a lease top-up premium of S$248 million to a fresh 99-year lease, the land rate translates to about S$1,889 per square foot per plot ratio (psf ppr) based on the gross plot ratio of 14. This would bring the effective acquisition cost close to S$960 million, assuming an apportionment of 60 per cent commercial and 40 per cent residential mixed-use project under the CBDIS for the proposed development.

The price of S$538 million is below an earlier reserve price of S$590 million.

JLL’s executive director for capital markets, Tan Hong Boon, said the sale had obtained more than 80 per cent of the owners’ consent prior to the close of the tender. The sale is subject to the expiry of the statutory five-day cooling-off period until Monday, and conditional on the CSC obtaining the approval of the sale from the Strata Titles Boards or the Court.

Tan said “Shenton House is the last remaining redevelopment opportunity at this stretch of the prime Shenton Way thoroughfare”.  

“Given the limited supply of new Grade A offices in the core of CBD, as occupiers look to locate to low-carbon modern office space as well as the limited availability of luxury rental housing in the area, the Shenton House site will fill these gaps timely and further contribute to the rejuvenation of Shenton Way,” he added.

This is Shenton House’s third attempt at public tender since April this year.

Shenton House’s successful en bloc sale follows that of Far East Shopping Centre, which was snapped up by a company linked to Bright Ruby Resources and Chinese businessman Du Shuanghua for around S$910 million in September.

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