KUALA LUMPUR (Oct 1): IOI Properties Group Bhd (KL:IOIPG) has agreed to acquire Shenton 101 Pte Ltd, which owns Singapore's Shenton House, from its group chief executive officer and major shareholder Datuk Lee Yeow Seng for a nominal S$1.00.

Under the deal, announced in a filing with Bursa Malaysia on Thursday, IOI Properties will also settle S$217.06 million (RM696.43 million) worth of shareholder advances (as at July 31, 2026) that Yeow Seng had injected into Shenton 101, the vehicle he incorporated to acquire the property. The final repayment sum will be determined on completion.

The transaction marks a reversal by the group’s non-interested directors, who turned down an earlier offer from Yeow Seng in August 2024, citing heavy capital commitments following several asset acquisitions at the time. To manage potential conflicts of interest, IOI Properties had entered into project and property management agreements for the building instead.

Shenton 101 won the tender to acquire Shenton House — a 25-storey strata-titled commercial development completed in the mid-1970s sitting on a 3,377-sq-metre site — for S$538 million in November 2023, with the purchase completed in June 2024.

The vehicle has S$376.23 million worth of borrowings, and owes Lee the interest-free shareholder advances. On completion of the deal, IOI Properties will consolidate the borrowings into its accounts.

The acquisition, which will be funded through IOI Properties’ internal funds, does not require shareholder approval as it makes up just 3.79% of IOIPG’s total assets, below the 5% materiality threshold under listing rules that would require a shareholder vote. However, it will require Bank Negara Malaysia's green light as the foreign currency investment exceeds the group's permissible limit, as well as consent from Shenton 101's lenders and the Singapore Land Authority.

IOI Properties said the acquisition will allow it to strengthen its presence in Singapore's Marina Bay precinct and unlock synergies with its existing asset portfolio, given Shenton House's walking distance to IOI Central Boulevard Towers and the recently acquired Asia Square Tower 2.

The group said it is revisiting the deal, on Yeow Seng's request, after its "circumstances and strategic position have evolved".

It pointed out that IOI Central Boulevard Towers has achieved over 95% committed occupancy and is self-sustaining in debt servicing. It has also completed the acquisitions of the remaining 50.1% stake in Scottsdale Properties Pte Ltd — which owns South Beach Tower, South Beach Avenue and JW Marriott Hotel Singapore South Beach — and Asia Square Tower 2.

It noted that its acquisitions in Malaysia have also continued to perform satisfactorily, and that shareholders had, on Sept 30, approved injecting W Kuala Lumpur hotel and Courtyard by Marriott Penang hotel into the upcoming IOI Properties REIT, in support of the group's capital recycling strategy.

“Although the group’s gearing has increased, the increase is largely attributable to acquisitions of income-generating assets in Singapore that have enhanced the quality of the group's investment property portfolio and strengthened its position in key gateway markets,” it said.

The group plans to redevelop Shenton House into a 35-storey mixed-use landmark featuring 12 floors of Grade-A offices, a 10-storey luxury hotel (165 keys), a retail basement and three carpark levels. This will expand its total net lettable area from 20,276 sq metres (218,246 sq ft) to 36,528 sq metres (393,185 sq ft). The underlying land tenure, which has a remaining lease of about 42 years, is expected to be renewed to a fresh 99-year term.

Savills appraised the market value of Shenton House as a redevelopment site at S$585 million, with an estimated gross development value of S$1.61 billion against total redevelopment costs of S$973.65 million.

Maybank Investment Bank is the principal adviser for the exercise, which is expected to be completed in the fourth quarter of 2026. Although not mandated by listing rules, IOI Properties also appointed Affin Hwang Investment Bank as an independent adviser to advise non-interested directors on the deal's fairness and reasonableness.

Yeow Seng and his brother Datuk Lee Yeow Chor, who is a non-independent non-executive director, are deemed interested parties and have abstained from all board deliberations and voting on the proposal.

The Lee family's private vehicle, Vertical Capacity Sdn Bhd, holds a controlling 65.673% stake in IOIPG, while Yeow Seng directly holds 3.768% and Yeow Chor has 0.012%.

The Employees Provident Fund is the largest institutional shareholder in IOIPG, with a 7.496% stake.

Shares of IOI Properties closed six sen or 1.73% lower at RM3.40 on Thursday, valuing the group at RM18.72 billion.