Cover Story: High-value, high-end offerings on the cards

This article first appeared in City & Country, The Edge Malaysia Weekly on January 15, 2024 - January 21, 2024

IOI Properties Group Bhd hopes to increase its annual revenue of RM2 billion to RM2.5 billion by launching more high–value, high-end projects, according to its newly appointed group CEO Lee Yeow Seng.

“We want to increase our annual sales by launching high-value projects [locally and abroad]. In Malaysia, we are looking at two flagship projects, which are Bandar Puteri Puchong and IOI Resort City,” Lee, 44, tells City & Country in a recent interview at the company’s headquarters in IOI Resort City, Putrajaya.

Second stint

Previously executive vice-chairman of IOI Properties, Lee was redesignated as its group CEO, following the retirement of Datuk Voon Tin Yow on July 1 last year.

A barrister-at-law of the Bar of England & Wales, Lee served at the London and Singapore offices of a leading international financial services group for about two years prior to joining IOI Properties.

After that, he was involved in corporate affairs and general management in the group prior to the demerger and listing of IOI Properties. He was appointed as the executive director of IOI Corp Bhd on June 3, 2008, and subsequently redesignated as non-independent non-executive director on Dec 18, 2013.


Lee joined the board of IOI Properties as executive director on Feb 25, 2013, and became CEO on Jan 8, 2014. He was subsequently redesignated as executive vice-chairman of IOI Properties on April 15, 2020, before assuming his current position.

When it comes to his management style, Lee believes in giving his staff the authority and freedom to make decisions within their portfolio while giving them the platform to grow with the company.

“Trust also has to be gained over time. If they gain my trust, then more freedom will be given to them. It is about teamwork … We need people from all levels to make our projects successful,” says Lee, who is a son of IOI Group founder, the late Tan Sri Lee Shin Cheng.

In his second stint as IOI Properties group CEO, Lee hopes to use his experience and exposure to take the company to the next level. For one, he notes that the developer has more than 500 acres of undeveloped land in IOI Resort City, whose value will be unlocked once the planned projects are unveiled. Lee says the development’s landmark property — IOI City Mall — now generates more than RM300 million pre-tax profit annually.

“It is also an attraction for people to live here. They can come to the mall via an underground walkway, which is part of our plan. We have various offerings here. Our hotels [Le Méridien Putrajaya and Putrajaya Marriott Hotel] are doing well, especially over the weekend.”

Staying relevant at IOI Resort City

IOI City Mall, which was the Gold winner in the Below 10 Years — Non-strata Retail category at The Edge Malaysia Best Managed & Sustainable Property Awards 2023, opened its doors in September 2014.

IOI Central Boulevard Towers is a Grade-A office project in Singapore (Photo by IOI Properties Group)
The mall was expanded in the second phase seven years later, bringing the total net lettable area (NLA) to 2.5 million sq ft and making it the biggest shopping mall in Malaysia.

The developer has positioned the Green Building Index (GBI)-certified mall as more than just a mall, offering attractions such as IOI City Farm, an 18,000 sq ft indoor edutainment exhibition space that provides family-friendly activities to learn about plants and animals; IOI Sports Centre, with a total of 15 badminton courts and two covered futsal arenas; an Olympic-size ice-skating rink; a 52,000 sq ft adventure park; and a Proton Premium Outlet with an after-sales car service centre. It also has the largest cinema in the country with 26 screens.

Lee says Phase 3 of IOI City Mall is still in the planning stage and construction will commence once all the relevant approvals have been obtained. Upon completion, the mall might be one of the biggest malls in the world, at 3.5 million sq ft of total NLA.

“We [also] plan to have more high-end products here for people looking for a nice and comfortable place, with greenery, to live in. These high-end products will be a mix of high-rise and landed properties,” he says.

Aerial 4
Aerial view of 16 Sierra (Photo by IOI Properties Group)
Artist’s impression of Seri Puteri Hills Town Villa @ Bandar Puteri Puchong (Photo by IOI Properties Group)

“As for Phase 4 of the mall, we plan to build a purpose-built concert hall so we can pull the younger crowd into this area. We will also build a 10-acre central park, similar to that of Desa ParkCity. With these additions, IOI Resort City will become a very conducive place to live in.

“As a developer and mall operator, it is important for IOI Properties to stay relevant and evolve with the times. We need to ensure that we are relevant to the market … The product we launch must be able to cater for the needs of the market.

“Consumer habits change very fast and we need to be on the lookout for what they are chasing after. We are still not complacent after 10 years and still invest in surveys with consumers to find out things such as their needs, requirements and the shops they hope to have here or patronise the most. From there, we can know what we need to improve on, while also convince some brands to come in. We will work with the tenants so they will evolve with the times as well.”

Further expansion at home and beyond

Lee believes the company has a competitive edge, with its almost 10,000 acres of land bank in the Klang Valley, Johor and Melaka. “Malaysia is our home market, and we want to grow it further. We accumulated this land bank over the years at an attractive price … Our book value is low, so our cost of development is much lower compared to that of our peers,” he says.

“Despite current market conditions, we can still achieve a gross profit margin of close to 30% in FY2023, which comes mainly from mass-market housing. As we develop more high-end properties, our profit margin will rise even further.”

IOI Industrial Park will have a phase launch in April (Photo by IOI Properties Group)
Arawani Home
Artist’s impressions of an Arawani home (left) and its interior (right) in Bangi (Photo by IOI Properties Group)

IOI Properties is also currently developing projects in Xiamen, China, and Singapore. Its project in China — IOI Palm City — is nearing completion, and Lee notes that the developer has no plans as yet to expand its presence in China because the country “is going through a difficult period”, but IOI Properties will continue to monitor the market. Investment properties that the developer owns in China include a mall, a hotel and office buildings.

Meanwhile, Lee is optimistic about the Singapore market. The company’s latest major projects there are IOI Central Boulevard Towers, which is topping out in August, and Marina View, an upcoming mixed-use development in Marina Bay.

IOI Central Boulevard Towers, a Grade-A office project and the company’s largest wholly-owned development in Singapore, will comprise two office towers of 16 and 48 storeys that sit on top of a seven-storey podium. It will have 1.26 million sq ft of office space and 30,000 sq ft of retail and F&B space.

The development already has a committed occupancy rate of 40%, with another 20% being negotiated in advanced talks. It is expected to receive its temporary occupation permit in 1Q2024.

Meanwhile, the Marina View project is reported to offer 905 private homes, 2,000 sq m in gross floor area for commercial space and 540 hotel rooms.

IOI Properties entered the Singapore market in 1996 with the development of the 12-storey IOI Plaza, now known as Singapore Pools Building. It later developed Cape Royale and Seascape in Sentosa Cove; The Trilinq in Clementi; and the South Beach mixed-use development on Beach Road.

Lee’s confidence in the Singapore market is also apparent via his personal investment there. His private entity, Shenton 101 Pte Ltd, has emerged as the sole bidder for Shenton House at the close of the collective sale tender on Nov 1.

The purchase price of S$538 million is equivalent to the reserve price, which was reduced from S$590 million when the collective sale was relaunched on Oct 20. The Collective Sale Committee of Shenton House had obtained more than 80% of the strata-titled owners’ consent to the lower reserve price of $538 million.

Lee was quoted in a news report on theedgesingapore.com as saying: “Owing 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.”

Shenton House, a stone’s throw away from both the IOI Central Boulevard Towers and the upcoming Marina View project, is said to be the last remaining redevelopment opportunity on this stretch of the prime Shenton Way thoroughfare. Lee says Shenton House will be redeveloped into a mixed-use project with hotel (40%) and office (60%) components.

Staying ahead of the competition

For Lee, the company’s profit of RM1.3 billion in FY2024 is an important parameter for the company’s growth. “It is more important than the share price. In terms of market capitalisation, we are also by far the highest in the property sector. Not only do we want to maintain it but we also want to be way ahead of our competitors. Then, we want to become a prominent regional player, and that’s why we are in Singapore. Our investment there is even bigger than some of the local developers.”

With about 1.3 million sq ft of space and a valuation of S$4,500 psf, IOI Central Boulevard Towers is worth at least S$6 billion (RM21 billion), Lee estimates. As for the Marina View project, with 700,000 sq ft of net saleable area worth S$5,000 psf, the gross development value is estimated at S$3.5 billion.

“We are a sizeable player in Singapore now and we are still looking to acquire more land there. I am positive towards Singapore as it grows into a business hub that involves a broad base of businesses. This will create demand for the rental market for residential and office. The CBD also lacks prime office space and the government is decentralising the office area. Also, the hospitality sector has been doing well after Covid-19,” he says.

“As for Malaysia, last year was better than the preceding year. This year we should be able to see more consumers being willing to spend and invest in property. Buying property is [still] the better investment.”

Source: The Edge