IOI Properties targets a 50% stake in One Raffles Place in Singapore

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IOI Properties targets One Raffles

Highlights

IOI Properties and CapitaLand Investment have jointly expressed interest in acquiring a 100% stake in One Raffles Place, Singapore, valued at S$2.4 billion, on a 50:50 basis.
OUE REIT owns an existing 81.54% stake in One Raffles Place, while United Overseas Bank holds 18.46% and also operates at the premises.
IOI Properties shares closed 1.19% lower at RM3.31, with a market capitalisation of RM18.23 billion, after gaining more than 56% over the past year.

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

Details of the proposed acquisition in Singapore's financial hub

As reported by The Edge Malaysia, citing a filing with Bursa Malaysia, IOI Properties said it had jointly submitted an expression of interest with an investment entity managed by CapitaLand Investment Ltd to acquire a 100% interest in One Raffles Place on a 50:50 basis.

The parties are currently conducting due diligence and holding exclusive discussions with the vendor to finalise mutually agreed terms. They are also working towards entering into definitive agreements and related transaction documents, subject to the satisfactory completion of due diligence during the exclusivity period.

IOI Properties' and CapitaLand Investment's interest in the asset emerged as early as August this year. At the time, the property was reported to be valued at S$2.4 billion, equivalent to RM7.65 billion.

One Raffles Place comprises two office towers and a retail podium. Tower 1 is a 62-storey office building with rooftop retail space, completed in 1986, while Tower 2 is a 38-storey office building with supporting retail space and basement levels, completed in 2012; the development also includes a five-storey retail podium with one basement level.

Impact on IOI Properties' regional strategy and market position

OUE REIT, backed by Indonesia's Riady family, which controls Lippo Group, owns an 81.54% interest in the property through a subsidiary, while United Overseas Bank holds the remaining 18.46% and occupies part of the complex.

For IOI Properties, the potential transaction comes as the group is also planning to list the RM7.58 billion IOIPG Malaysia Real Estate Investment Trust on the Main Market by year-end. On Monday, the company signed an underwriting agreement with six financial institutions.

IOI Properties said it will keep shareholders informed of material developments and make further announcements to Bursa Malaysia, including if definitive agreements are signed. The group's shares closed four sen, or 1.19%, lower at RM3.31 per share, giving it a market capitalisation of RM18.23 billion, after rising more than 56% over the past year.

IOIPG Malaysia REIT underwriting agreement for a Main Market IPO was previously reported by us, when the REIT entered into a partnership with six financial institutions to support an offering of up to 2.2 billion units and target a listing by year-end. The report also outlined the IPO structure, a target distribution of at least 90% of distributable income each quarter, and a portfolio of nine assets worth approximately RM7.66 billion, anchored by IOI City Mall and six Marriott-branded hotels.

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