Shenton House Sold En Bloc for S$538 Million to Malaysia’s IOI Properties’ Lee Yeow Seng
Following the Record-Breaking Sale of Far East Shopping Centre, Singapore’s Prime Commercial Sector Draws Another Major Player with the Acquisition of Shenton House in Prestigious District 1
Singapore’s real estate landscape has witnessed another significant transaction as Shenton House, nestled in the heart of the Central Business District (CBD), has been sold en bloc for S$538 million.
This en bloc sale, expertly facilitated by JLL, the sole marketing agent, marks the property’s third attempt at a public tender, with the deal closing on November 1st.
The buyer, Shenton 101 Pte Ltd, is a private entity owned by Lee Yeow Seng, the Group Chief Executive Officer of IOI Properties Group (IOIPG), a notable name listed on Bursa Malaysia Securities.
Lee Yeow Seng opted for a personal acquisition through Shenton 101 Pte Ltd., citing the acquisition’s scale and the collective sales committee’s tight timeline as pivotal reasons.
This strategic move is not just a personal venture for Lee but a complementary addition to IOIPG’s already significant presence in the Marina Bay area, highlighted by notable projects like IOI Central Boulevard Towers, W Marina Bay, and Marina View Residences.
The acquisition and planned redevelopment of Shenton House align perfectly with IOIPG’s existing investments, enhancing its footprint in the Marina Bay vicinity.
Shenton House’s Redevelopment Potential
Shenton House, a commercial landmark with a rich history dating back to the 1970s, stands on leasehold land spanning 36,250 sq ft along the prominent Shenton Way.
Its potential for redevelopment is amplified by the CBD Incentive Scheme (CBDIS), which allows a 25% bonus on gross floor area (GFA), translating to a gross plot ratio of 14.
This opens up possibilities for a mixed-use commercial space featuring luxury residential units or a hotel, thereby rejuvenating the CBD core with modern, low-carbon office spaces and upscale residential rentals.
A Vision for Prime Offices and Luxury Residences
Lee Yeow Seng’s vision for the site is ambitious. He plans to transform the over half-million-square-foot GFA of Shenton House into a prime Grade A office space coupled with luxury-branded serviced residences.
This reflects his steadfast confidence in Singapore’s prime office sector and the residential rental market, a sentiment that resonates with Singapore’s stature as a leading financial and business hub in Asia.
Financial Aspects and Conditions of the Sale
The sale, initiated at a reserve price of S$538 million, below the earlier reserve of S$590 million, reflects a land rate of about S$1,889 per square foot per plot ratio (psf ppr), considering the costs for land betterment charge and lease top-up premium to a fresh 99-year lease.
Taking into account an allocation of 60 percent for commercial use and 40 percent for residential use in the mixed-use project under the CBDIS, the total effective cost of acquisition is estimated to approach the S$960 million mark for the proposed development.
The acquisition is subject to a statutory five-day cooling-off period and is contingent on approval from the Strata Titles Boards or the Court.
A Prime Redevelopment Opportunity
Shenton House stands as the last remaining redevelopment opportunity on the Shenton Way stretch, as a statement by Tan Hong Boon, JLL’s Executive Director of Capital Markets, further accentuates.
The envisaged development aims to bridge the gap in the demand for quality office spaces and luxury rental housing in the area, contributing significantly to the ongoing rejuvenation of Shenton Way.
Reflecting Confidence in Singapore’s Real Estate Market
The successful en bloc sale of Shenton House follows in the footsteps of other notable transactions like the Far East Shopping Centre, reflecting a burgeoning confidence among commercial property owners in Singapore’s real estate market.
As developers and investors like Lee Yeow Seng of IOI Properties Group continue to recognize and capitalize on Singapore’s robust fundamentals, the nation’s skyline is set for a transformative trajectory, heralding a new era of urban redevelopment and architectural excellence.
The Cumulative Acquisition Expenses, Encompassing the Land Betterment Charge and Lease Renewal, are Anticipated to Approach S$960 Million
With The Implementation of The CBD Incentive Scheme, Shenton House is Poised to Witness its Gross Plot Ratio Escalate to 14.0
The Unprecedented Sale of The Far East Shopping Centre Has Ignited a Trend, Prompting Numerous Commercial Property Owners to List Their Assets on the Collective Sale Market
Exploring the Foundations and Leadership of IOI Properties Group and Lee Yeow Seng
The Pillars of the IOI Properties Group
IOI Properties Group Berhad (IOIPG), an acclaimed entity among Malaysia’s top-ten property developers, boasts a rich legacy exceeding four decades in the realm of property development.
The Group’s diversified portfolio spans across three pivotal segments: property development, property investments, and hospitality and leisure, with a geographical footprint that stretches from Malaysia to the bustling markets of Singapore and the vibrant landscapes of Xiamen in the People’s Republic of China (PRC).
Central Boulevard Towers is a prestigious development by IOI Properties Group.
Leadership Insight: Lee Yeow Seng
At the helm of IOI Properties Group Berhad is Mr. Lee Yeow Seng, serving as the Chief Executive Officer (CEO).
His journey with IOIPG began on February 25, 2013, as an executive director. After a brief hiatus as Executive Vice Chairman, Mr. Lee reassumed his role as CEO, steering the group with his visionary leadership and extensive experience.
Educational and Professional Background
Mr. Lee Yeow Seng, a barrister-at-law from the Bar of England & Wales by Inner Temple, holds an LLB (Honours) from King’s College London.
His professional journey includes a two-year stint in the London and Singapore offices of a leading international financial services group.
Since his transition to the IOI Group, Mr. Lee has been deeply involved in corporate affairs and general management, significantly contributing to the group’s growth trajectory.
Mr. Lee Yeow Seng is the Chief Executive Officer (CEO) of IOI Properties Group
Strategic Role and Contributions
As CEO, Mr. Lee’s primary responsibility revolves around the oversight of management and business operations within IOIPG.
His role is pivotal in formulating and executing the group’s strategic initiatives and engaging in long-term planning. His profound expertise and leadership are instrumental in navigating IOIPG through the ever-evolving landscape of the property development industry.
In addition to his leadership at IOIPG, Mr. Lee also serves as a Non-Independent Non-Executive Director of IOI Corporation Berhad, further solidifying his influential presence in the corporate sphere.
In conclusion, the synergy between IOI Properties Group’s robust foundation and Mr. Lee Yeow Seng’s strategic leadership positions the group at the forefront of the property development industry, continually shaping the skylines of Malaysia, Singapore, and China with sustainable and innovative projects.
Commercial En Bloc Sales Gain Momentum Once Again in Singapore
The real estate market in Singapore is witnessing a remarkable resurgence in the commercial en bloc sales arena, marking a significant uptick in investor confidence and strategic real estate acquisitions.
This trend is emblematic of the robust recovery and the potent allure that the Singaporean commercial property market holds for both local and international investors.
First Commercial Site To Be Sold in 2023 Was GSM Building at S$80 million
Follow by GS Building at Lorong Ampas. JVA Venture Acquired for S$67 million
Far East Shopping Centre Was the Third Sites That Found a Buyer, It Was Sold at a Record Price.
Shenton House is the Latest Site to Join the Successful En Bloc List
The Fourth Commercial En Bloc Sold in 2023
In a year that’s shaping up to be a defining one for commercial real estate transactions, Singapore has already seen the completion of its fourth commercial en bloc sale.
This marks a continued trajectory of growth and vibrancy in the sector, highlighting the city-state’s appeal as a prime destination for commercial investment.
The recent en bloc sales underscore a renewed enthusiasm in the market, as developers and investors alike are actively seeking opportunities to capitalize on the strategic locations and potential for redevelopment that these properties offer.
The trend also reflects a broader economic optimism as Singapore continues to position itself as a global business hub.
Looking Ahead
As Singapore continues to cement its position as a leading global city for business, the commercial real estate sector is poised for sustained growth.
The increasing frequency of en bloc sales not only reflects the market’s current dynamism but also signals a positive outlook for the future.
Investors, developers, and stakeholders will be keeping a keen eye on this trend as it unfolds, ready to seize the opportunities that the burgeoning Singaporean commercial property market presents.