IOI Properties, CapitaLand in exclusive talks to buy One Raffles Place for S$2.4b
OUE REIT said it is in exclusive talks with IOI Properties and CapitaLand Investment for the sale of One Raffles Place, a prime office complex in Singapore's CBD valued at S$2.3-2.4 billion. The 50-50 joint bid, if successful, would add to IOI Properties' string of Singapore office acquisitions this
SINGAPORE – OUE REIT, whose indirect subsidiary OUB Centre holds an 81.54 per cent interest in One Raffles Place, said on Thursday it was in exclusive talks with IOI Properties and CapitaLand Investment regarding the sale of the property.
"Negotiations between the parties and due diligence by the purchasers are currently still ongoing, and parties have yet to enter into any binding agreement for the sale," the real estate investment trust's manager said in a regulatory filing cited by The Business Times. There is no certainty that a transaction will materialize, it added.
The REIT, backed by Indonesia's Riady family, holds a 67.95 per cent effective interest in the building via OUB Centre. UOB, one of Singapore's biggest lenders, owns the remaining 18.46 per cent not held by OUB Centre.
IOI Properties group CEO Lee Yeow Seng earlier told BT that his firm and CapitaLand Investment were conducting exclusive due diligence for the acquisition and had submitted a 50-50 joint bid to the property owners. Located in Singapore's central business district, One Raffles Place consists of two office towers of 62 and 38 floors, as well as a six-level retail mall. The development spans more than 65,000 square meters of gross leasable area and rises 280 meters, making it one of the tallest in the city-state. Market estimates value the prime commercial complex at S$2.3-2.4 billion (US$1.79-1.88 billion).
A deal, if reached, would add to IOI Properties' series of Singapore CBD office acquisitions this year. Earlier this month, the group announced a conditional agreement to acquire the company that owns Shenton House from its group CEO for a nominal S$1. The deal also involves repaying S$217.06 million in shareholder advances to the executive. In April, IOI Properties agreed to purchase Asia Square Tower 2 in Marina Bay for about US$1.95 billion from a REIT backed by CapitaLand Investment.
Lee has regarded Singapore's CBD as the country's most attractive location for property investment. "If you want to invest in properties, location is always the most important overriding consideration," he told The Straits Times in an interview on Wednesday. "There's no better address and location than Marina Bay." His confidence in the CBD is underpinned by his view that Singapore has become a safe haven for high-net-worth individuals, whose presence is expected to sustain demand for premium office space, high-end homes and upscale hotels. He also pointed to the city-state's limited land supply and government control over land releases as factors that provide greater certainty for property investors.
IOI Properties is controlled by Yeow Seng and his brother Lee Yeow Chor, according to Forbes, and is part of a business empire started by their late tycoon father Lee Shin Cheng that also includes palm oil giant IOI Corporation. The brothers placed third on a ranking of the richest people in Malaysia in April with a combined estimated net worth of US$8.5 billion.
