IOI Properties targets Singapore private real estate fund, secondary listing in early 2027

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Highlights

IOI Properties is marketing a fund backed by assets worth S$6 billion, with the potential to raise nearly RM10 billion through the sale of a 50% stake to investors.
The company aims to reduce net debt to 30%-50% of equity over the next three to five years, from around 85% at the end of June, through initiatives including a Singapore private real estate fund.
The secondary listing on the Singapore Exchange, planned for early 2027, is expected to broaden IOI Properties' access to capital and unlock around RM2 billion in value.

This article was translated from the original. Read the original version by our correspondent here.

Singapore fund plan and debt reduction

The Edge Malaysia reported that the property developer had begun marketing a fund backed by assets worth S$6 billion, equivalent to RM19.1 billion, to investors, chief executive officer Datuk Lee Yeow Seng said on Tuesday.

He said the illustrative sale of a 50% stake in the fund could raise nearly RM10 billion for IOI Properties. The move would provide a significant boost to the group as it pursues several initiatives to reduce leverage following its previous aggressive acquisitions, he said.

IOI Properties aims to reduce net debt as a percentage of equity to 30% to 50% over the next three to five years, from around 85% at the end of June. Lee said the company had identified South Beach and IOI Central Boulevard Towers for inclusion in the Singapore private trust fund, with both properties mature, close to full occupancy and generating yields on cost of nearly 4% to 5%.

He said the fund could offer investors a yield of at least 3.5%, in line with market rates for prime Grade A office space in Singapore. The company also expects investors to benefit from potential capital appreciation of nearly 10% over five to seven years.

Impact on listing and group valuation

In addition to the fund, IOI Properties is also in discussions with the Singapore Exchange over its secondary listing, targeted for early 2027. Lee previously said the process could be completed quickly because many compliance requirements were already in place through its primary listing on Bursa Malaysia.

He also said the general offer for a 10% stake in IOI Properties by Vertical Capacity Sdn Bhd, a vehicle controlled by the Lee family, should unlock nearly RM2 billion based on the current valuation of around RM20 billion. This series of corporate moves represents a major exercise that could generate substantial cash flow for the group, he said.

Expanding its presence in Singapore is also seen as important to IOI Properties' market strategy, given that premium office assets in the republic could attract institutional investors. A secondary listing and the establishment of a private fund could broaden the company's access to capital while supporting balance-sheet restructuring in the regional property sector.

In our previous article on IOI Properties Group's aggressive expansion in Singapore's commercial property market, we covered the group's talks to assess and potentially acquire key assets such as Chijmes and the Capitol Kempinski hotel, as well as its interest in other core assets. We also highlighted how the increase in net debt to around 85% of equity prompted plans to establish a S$6 billion private fund anchored by South Beach and IOI Central Boulevard Towers, as a catalyst for deleveraging and support for future growth.

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