CDL Selling 50.1% Stake in $2.1B Singapore Complex to JV Partner IOI Properties

SGX-listed City Developments Ltd has agreed to sell its 50.1 percent interest in a central Singapore mixed-use complex to its joint venture partner, Malaysia’s IOI Properties Group, in a deal valuing the asset at S$2.75 billion ($2.1 billion).

CDL is exiting its investment in South Beach, an integrated development directly connected to the Esplanade and City Hall MRT stations, at a 3 percent premium to the property’s latest independent valuation of S$2.67 billion, the company said Wednesday in a release. IOI is acquiring full ownership of the commercial components of South Beach, a six-building cluster comprising office and retail spaces, a 634-room JW Marriott hotel and 190 strata-titled luxury residences.

The estimated sale consideration is S$834.2 million, based on CDL’s share of the JV’s consolidated net assets, with the group controlled by executive chairman Kwek Leng Beng seeking to use the proceeds to reduce leverage and redeploy capital.

The transaction marks a rare disposal of a core asset for Singapore’s largest non-state-controlled builder, which last year sold its Cideco Industrial Complex in the Geylang area and various strata units in the city as part of more than S$600 million in global divestments.

“This strategic divestment enables CDL to realise exceptional value, while entrusting the ownership to a partner that knows South Beach well, marking a natural evolution in our successful partnership,” Kwek said in Wednesday’s announcement.

Prominent Player Rising

A CDL-led consortium won the Beach Road site at a government land tender in 2007 with a bid of just under S$1.7 billion. IOI entered the joint venture in 2011, and the project obtained a temporary occupation permit in late 2016. The property has 81 years remaining on its 99-year land lease, with the South Beach Residences component fully sold since 2021.

The project integrates four historical buildings with two modern 34- and 45-storey towers housing the office and living components. South Beach’s 508,869 square feet (47,275 square metres) of office space had committed occupancy of 92.4 percent at the end of March, while the 30,797 square foot retail section was 92.5 percent occupied.

Upon completion of the transaction in the third quarter of 2025, South Beach will add to the stable of Singapore assets held by IOI Properties, an aggressive acquirer of city-state real estate in recent years.

The Kuala Lumpur-listed developer paid the equivalent of $1.1 billion to acquire a mixed-use plot in Marina Bay in 2021, with the site to host an integrated development featuring high-end apartments and the 350-room W Singapore Marina View. The group’s IOI Central Boulevard Towers office complex opened last year with banking giant Morgan Stanley leasing five floors.

The South Beach buy is IOI’s first acquisition in the city-state since the hiring of former Frasers Property China head Lorraine Shiow as Singapore CEO and the appointment of Chelsfield’s David Tibbott as managing director for asset management in the Lion City.

“Combined with the IOI Central Boulevard Towers and the W Singapore Marina View hotel, this acquisition will elevate the group’s profile as one of the major landlords of premium office space and a prominent player in the hospitality industry within the republic,” said CEO Lee Yeow Seng.

Normalising Relations

With the divestment of South Beach, CDL will continue to hold a Singapore commercial and retail portfolio with 2.6 million square feet of existing and pipeline lettable space and operate six Lion City hotels totalling 2,608 rooms, the company said. The developer’s net gearing ratio of 117 percent is expected to drop to 103 percent.

The deal signals a further thaw in relations between Kwek and his son, CDL CEO Sherman Kwek, after the billionaire patriarch withdrew a lawsuit against the scion in March following a row over the composition of the group’s board of directors.

“We will continue to unlock value across our diversified portfolio and pursue future growth opportunities,” Sherman Kwek said in Wednesday’s statement.

CDL emerged as the top bidder for a residential plot in Singapore’s Jurong Lake area in a tender that closed Tuesday. The developer offered S$608 million ($472.4 million) to edge out five competing bids for the site adjacent to Lakeside MRT station, according to the Urban Redevelopment Authority, which organised the tender.