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Lee Yeow Seng of Malaysia's IOI Properties Group to buy Shenton House for $538 mil

Cecilia Chow
·4-min read

IOIPG has a substantial interest in the Marina Bay area via IOI Central Boulevard Towers and the Marina View development

Shenton 101, a private company owned by Lee Yeow Seng, CEO and major shareholder of Bursa Malaysia-listed IOI Properties Group, has emerged as the sole bidder for Shenton House at the close of the collective sale tender at 3pm on Nov 1. JLL is the marketing agent for Shenton House.

The purchase price of $538 million is equivalent to the reserve price, which was reduced from $590 million when the collective sale was relaunched on Oct 20.

“Due to the size of the subject acquisition and the tight timing set by the sales committee of this collective sale, I feel that it would be more appropriate to bid for Shenton House via a privately-owned vehicle,” says Lee of IOI Properties Group (IOIPG).

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The Collective Sale Committee (CSC) of Shenton House had obtained more than 80% of the strata-titled owners’ consent to the lower reserve price of $538 million before the close of the tender on Nov 1.

However, the sale is conditional on a five-day statutory cooling-off period and the CSC obtaining the approval of the sale from the Strata Titles Board or the Court.

Last remaining redevelopment opportunity
Situated at 3 Shenton Way, Shenton House has a prominent triple frontage and a site area of 36,350 sqft that is zoned “commercial” with a gross plot ratio (GPR) of 11.2 in the 2019 Master Plan. The site has a 99-year lease from June 2, 1969. It is one of the last buildings from the 1970s still standing on Shenton Way.

“Shenton House is the last remaining redevelopment opportunity at this stretch of the prime Shenton Way thoroughfare,” says Tan Hong Boon, JLL executive director of capital markets who brokered the deal.

Under the CBD Incentive Scheme, the Shenton House site is eligible for a 25% bonus gross floor area. It could be redeveloped into a mixed-use development with commercial, residential, or hotel at the GPR of 14.0.

Shenton House’s purchase price of $538 million reflects a unit land rate of $1,885 psf per plot ratio (psf ppr) based on the GPR of 14.0, after factoring in land betterment charges and lease top-up premium to a fresh 99-year term. The unit land rate is also based on a proposed redevelopment into a mixed-use project with 60% commercial and 40% residential components under the CBD Incentive Scheme, with a 25% uplift in GPR.

“With over half a million sq ft of gross floor area, we will develop this strategically located and very prominent site into a premier Grade A office and luxury branded serviced residences,” says IOIPG’s Lee. “This purchase demonstrates my continued confidence in Singapore’s prime office sector and residential rental market.”

Lee adds: “Shenton Way is where Singapore’s first CBD is located. It pays homage to Singapore’s transformation as a global financial centre akin to how the late LKY [Lee Kuan Yew, Singapore’s Founding Prime Minister] described Singapore as transforming itself from a third-world city to a first-world city.”

‘Timely and synergistic’

IOIPG has a substantial interest in the Marina Bay area via IOI Central Boulevard Towers and W Marina Bay and Marina View Residences mixed-use development.
Shenton House is strategically located between the two sites. “We believe that the redevelopment of Shenton House is both timely and synergistic to IOIPG’s presence in Marina Bay,” Lee says.

IOI Central Boulevard Towers has 1.29 million sq ft of premium office space and 30,000 sq ft of retail space. Slated for completion in 1Q2024, the commercial complex will have a direct link to the Central Boulevard MRT station on the Downtown Line. IOIPG paid $2.57 billion for the 99-year leasehold white site in a government land sale (GLS) tender in November 2016.

The Marina View development is also on a white site, which IOI purchased for $1.508 billion in September 2021. The mixed-use development will have 683 high-end residences (Marina View Residences) and a luxury hotel (W Marina Bay). The mixed-use development is within a short walk of Shenton MRT Station on the Thomson-East Coast Line.

Elsewhere in the Downtown Core, IOI has a 49.9% stake in the consortium that developed South Beach, a mixed-use development with 510,000 sq ft Grade-A office space, 190 luxury apartments at South Beach Residences, the 634-room JW Marriott Singapore South Beach and 32,000 sq ft retail and F&B space. The development is linked underground to the Esplanade MRT Station on the Circle Line.

IOIPG’s bid for Shenton House is a recognition of the attractiveness of Singapore’s office and residential rental markets, underpinned by the city state’s “exceptional fundamentals as Asia’s financial and business centre”, says JLL’s Tan.

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