IOI Properties receives proposal from CEO to jointly develop Shenton House in Singapore

KUALA LUMPUR (June 25): IOI Properties Group Bhd (KL: IOIPG) has actually received a plan from its group chief executive officer cum major investor Lee Yeow Seng to join the property development of Shenton House, a business property located in Singapore that his special vehicle has actually successfully tendered for, for S$ 538 million (RM1.9 billion).

At market close on Tuesday, IOI Properties’ shares went down 4 sen or 1.75% to RM2.25, bringing the business a valuation of RM12.39 billion.

“Further, according to the Singapore’s central business district incentive program, Shenton House is qualified for a 25% bonus gross flooring space that can be redeveloped right into a mixed-use commercial with non commercial project or a hotel at the GPR of 14. As such, Shenton House is allocated for redevelopment right into a fresh 99-year leasehold business development,” IOIPG stated.

According to IOIPG, Yeow Seng has proposed the acquisition consideration be determined based upon the real expense of investment acquired by himself and Shenton 101, multiplied by the equity interest in Shenton 101 to be obtained by IOIPG, or an equal subscription price for the subscription of new stakes in Shenton 101.

Shenton 101 was the sole prospective buyer of Shenton House, that lies in Singapore’s central business center. Yeow Seng previously pointed out he felt it was better to bid for Shenton House through his exclusive vehicle due to the dimension of the subject and the tight time established by the sales committee on the collective sale.

IOIPG stated the proposition stands for four months, and that might be prolonged by an additional 2 months if a written demand is obtained from IOIPG.

The present additional present resources obligation– omitting the development cost, which is to be settled– is S$ 476 million, that includes land enhancement fee, rent top-up premium, and transaction expenditures, it claimed.

Midtown Bay condominium

According to a stock exchange filing, Yeow Seng has actually suggested that IOIPG acquire entirety or part of his own vehicle, Shenton 101 Pte Ltd, that is preparing to redevelop Shenton House, works for which are planned to start rearmost of 2025.

“The good faith intent of Yeow Seng is not to make a private gain developing from the proposal. Thus, the consideration is to involve the first price of investment of equity in Shenton 101 and the expense acquired by Shenton 101 for the procurement of Shenton House and any upfront costs incurred by Shenton 101 such as consultants’ fees and costs and tender, application and approval expenses along with price of finance,” IOIPG added.

“Yeow Seng has actually emphasised to IOIPG that Shenton 101 is all ready and capable to proceed with the development planning of Shenton House following the conditions of the tender and that Shenton 101 is well on the way to put in place funding to enable it to proceed with the redevelopment and that the purpose that Yeow Seng is prolonging the contract to IOIPG is to assist fix or deal with the possible problem of interest situation,” IOIPG’s declaring read.

Yeow Seng and his brother Datuk Lee Yeow Chor are major investors of IOIPG through their significant shareholdings in Vertical Capacity Sdn Bhd, which carries 65.67% in IOIPG.

This is to deal with and reduce the potential problem of interest that will emerge because of his part in the redevelopment of Shenton House via Shenton 101, through which he is the sole shareowner. The intent of the proposal is to align the matters of IOIPG thereupon of Shenton 101, that are going to maintain the redeveloped property as property investment upon its effective redevelopment.

Shenton House covers 3,377 square metres and is assigned for retail usage with a gross plot ratio (GPR) of 11.2. The property has a 44-year land contract, with the possible to be lengthened to a fresh 99-year lease.

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