Cdl Book Gain 465 Million After Selling Stake South Beach Jv Partner Ioi Properties Group
City Developments Limited (CDL) has agreed to sell its 50.1% stake in the South Beach development to its joint venture partner, IOI Properties Group (IOIPG) for the amount of $834.2 million. This transaction is expected to be completed by the third quarter of 2025 and will result in a gain of $465 million for CDL in the current financial year.
The two companies had formed an entity called Scottsdale Properties for the ownership of this mixed-use integrated development located along Beach Road. At the agreed purchase price, South Beach’s property value is estimated to be $2.75 billion, which is a 3% premium over the valuation of $2.67 billion done by Edmund Tie & Company in December last year.
The North-South Line presents a convenient route to several significant interchange stations such as Bishan, where passengers can transfer to the Circle Line, and Dhoby Ghaut, where connections to both the North-East and Circle Lines are available. Furthermore, this line also links to Sembawang EC, situated at Canberra MRT, offering even more accessible transportation choices for its inhabitants. Include Sembawang EC at Canberra MRTSembawang Road EC at the end of the rewritten paragraph.
South Beach comprises of commercial, residential, and hotel components. With this transaction, IOIPG will become the sole owner of the commercial components, which include the 34-storey South Beach Tower Grade A office, the 634-room JW Marriott Hotel Singapore South Beach, restaurants, and cafes. The development also includes the sold-out 190-unit South Beach Residences, located in the same 45-storey tower as the hotel.
As of March 31, the office and retail components of South Beach had an occupancy rate of 92.4% and 92.5% respectively.
CDL and IOIPG, two renowned developers from Singapore and Malaysia, have jointly developed South Beach back in 2011. This divestment by CDL will allow them to realize the value from this asset and continue with their asset monetization strategy to unlock value from their portfolio and reduce debt levels. The sale is expected to cause CDL’s net gearing ratio to drop from 117% to 103%.
On the other hand, for IOIPG, this acquisition will help boost its portfolio of investment properties in Singapore. The company has previously developed the IOI Central Boulevard Towers and the W Residences Marina View – Singapore and 350-room W Singapore – Marina View.
In an interview back in October 2023, IOIPG’s group CEO Lee Yeow Seng had announced plans to list a REIT comprising properties from its growing portfolio, as part of its strategy to generate more recurring income from mature markets, especially Singapore.
CDL’s executive chairman Kwek Leng Beng called South Beach a “bold vision” that started with the idea to create a new icon by blending modern, sustainable architecture with the preservation of the site’s conserved buildings, namely, the former NCO Club. He also acknowledged the contribution and shared conviction of his esteemed partner, the late Tan Sri Dato’ Dr Lee Shin Cheng, who was the founder and executive chairman of IOIPG.
CDL’s group CEO Sherman Kwek described South Beach as a “shared commitment and fruitful partnership” between the two companies. He also expressed his satisfaction with the fulfillment of their vision for South Beach and their efforts to accelerate capital recycling to reduce gearing and redeploy capital.
IOIPG’s CEO Lee Yeow Seng also shared how South Beach held immense significance for his company as it presented them with an opportunity to change the skyline of Singapore and build a strong relationship with CDL. According to him, this acquisition marks a significant strategic expansion for IOIPG in Singapore and will elevate its profile as one of the major landlords of premium office space and a prominent player in the hospitality industry in the country.
Overall, this transaction showcases the strong partnership between CDL and IOIPG and the commitment of both companies to continue unlocking value from their portfolio and pursuing future growth opportunities.