IOI Properties to acquire prime Singapore office asset for RM7.8b

IOI Properties Group Bhd (IOIPG) is acquiring Asia Square Tower 2 (AST2), a premium Grade A office asset in Singapore’s Marina Bay financial district, from CapitaLand Integrated Commercial Trust for S$2.476 billion (RM7.769 billion) on a willing-buyer, willing-seller basis.

The deal cements IOIPG’s standing as a major landlord in Singapore’s central business district (CBD), expanding its portfolio to a total net lettable area (NLA) of 2.57 million sq ft, the company said in a statement.

IOIPG CEO Datuk Lee Yeow Seng said Singapore remains a cornerstone market for the group.

“This latest acquisition reflects IOIPG’s continued conviction in prime Singapore assets, which offer stable recurring income streams supported by strong market fundamentals. In particular, assets within the Marina Bay precinct are well-positioned to benefit from sustained demand, limited supply and ongoing urban transformation,” he said.

AST2 is a landmark development offering approximately 773,460 sq ft of premium Grade A NLA, and is directly linked to IOI Central Boulevard Towers via an elevated pedestrian bridge.

In an exchange filing today, IOIPG said its wholly owned subsidiary, IOI Marina View Pte Ltd (formerly IOI Orchard Pte Ltd), had on April 17 entered into a put and call option agreement (PCOA) with HSBC Institutional Trust Services (Singapore) Ltd, in its capacity as trustee of CapitaLand Commercial Trust (CCT). 

CICT is managed by CapitaLand Integrated Commercial Trust Management Ltd, a wholly owned subsidiary of CapitaLand Investment Ltd.

As AST2 is already operational, IOIPG said it does not expect any additional material financial outlay to bring the asset on-stream upon completion of the proposed acquisition.

IOIPG noted that the agreed property value represents a S$50 million discount to the market value appraised by independent valuer Savills Valuation and Professional Services (S) Pte Ltd on April 12.

The group already has a presence in Singapore’s CBD through IOI Central Boulevard Towers and South Beach Tower. Collectively, these assets will form a “critical mass of premium commercial developments” valued at about S$10 billion, fully owned and controlled by IOIPG.

As at March 31, the Singapore portfolio recorded an average occupancy rate of 95.8%.

Following the acquisition, IOIPG’s Singapore investment properties will have a combined NLA of 2.57 million sq ft. — TMR