Cdl Book Gain 465 Million After Selling Stake South Beach Jv Partner Ioi Properties Group
City Developments Ltd (CDL) has announced the sale of its 50.1% stake in the South Beach development to its joint venture partner IOI Properties Group (IOIPG) for a total of $834.2 million. This will result in a gain on disposal of $465 million for the current fiscal year of 2025.
The South Beach development, located along Beach Road, consists of a mixed-use integrated development that has been jointly owned by CDL and IOIPG through a holding company called Scottsdale Properties. At the agreed purchase price of $834.2 million, the implied property value of South Beach is $2.75 billion. This represents a 3% premium over the valuation of $2.67 billion accorded by Edmund Tie & Company as of December 2024.
Upon completion of the transaction, which is expected by the third quarter of 2025, IOIPG will gain full ownership of the commercial components of South Beach, including the 34-storey Grade A office tower, the 634-room JW Marriott Hotel Singapore South Beach, and the various restaurants and cafes. South Beach Residences, a strata-titled development located in the same 45-storey tower as the hotel, has already sold all 190 units since its launch in September 2021.
As of March 31, the office and retail components of South Beach have achieved committed occupancies of 92.4% and 92.5%, respectively.
CDL and IOIPG initially joined forces to develop South Beach back in 2011. The divestment of CDL’s stake will allow the company to unlock value from this asset and reduce its debt levels.
According to CDL, the sale will also help to reduce its net gearing ratio from 117% to 103%.
On the other hand, the acquisition will help to boost IOIPG’s portfolio of investment properties in Singapore. The company has also developed other properties in the country, including IOI Central Boulevard Towers, W Residences Marina View – Singapore, and W Singapore – Marina View, which has 350 rooms.
In an interview with The Straits Times in October 2023, IOIPG’s group CEO Lee Yeow Seng revealed plans to list a REIT comprising properties from its growing portfolio as part of a broader strategy to generate more recurring income from mature markets, especially Singapore.
In a joint statement, CDL’s executive chairman Kwek Leng Beng acknowledges how the development of South Beach began as a “bold vision” to create a new icon blending modern, sustainable architecture while preserving the site’s conserved buildings, namely the former NCO Club. Kwek also makes it a point to acknowledge the late founder and executive chairman of IOIPG, Tan Sri Dato’ Dr Lee Shin Cheng, who was his esteemed partner in this project.
“Today, South Beach is a testament to our long-standing collaboration, foresight, and resilience. As this property reaches maturity, we have fulfilled our promise,” says Kwek.
He adds that CDL will now be able to realize exceptional value while entrusting the ownership to a partner who has a deep understanding of the development.
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CDL’s group CEO Sherman Kwek says South Beach represents the shared commitment and fruitful partnership between CDL and IOIPG over the past decade. He also adds that the divestment of South Beach will help accelerate the company’s capital recycling efforts, allowing it to reduce its gearing and redeploy capital. CDL will also continue to unlock value across its diversified portfolio and pursue future growth opportunities.
IOIPG’s Lee says that South Beach holds immense significance for the company, having provided it with the opportunity to change the skyline of Singapore while building a good relationship with CDL, a leader in the real estate industry.
“The exemplary leadership of Mr. Kwek Leng Beng, his grit and steadfast vision were instrumental in transforming this site, a place of great historical and sentimental value to many of the Singaporeans and visitors alike,” says Lee.
He also adds that 100% ownership of South Beach marks a significant strategic expansion for IOIPG in Singapore. “Combined with the IOI Central Boulevard Towers (ICBT) 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,” says Lee.
As of March 31, the total assets of IOIPG, including investment properties, hotel assets, and property development assets, was RM47.93 billion. The company says that it will keep its options open for any opportunities by leveraging and optimizing its position to create additional value for its stakeholders.