This article first appeared in The Edge Malaysia Weekly on October 5, 2026 - October 11, 2026

In a U-turn, IOI Properties Group Bhd (KL:IOIPG) has decided to acquire Shenton 101 Pte Ltd, the owner of Shenton House in Singapore, from its group CEO and major shareholder Datuk Lee Yeow Seng for a nominal S$1. The move reverses the board of directors’ decision in August 2024 to reject the acquisition amid concerns about IOI Properties’ already-high gearing.

This time around, analysts appear less concerned, citing the group’s ability to recycle capital from its growing investment property portfolio. The upcoming listing of its RM7.58 billion IOIPG Malaysia REIT on Bursa Malaysia’s Main Market is another potential source of capital.

As at end-June 2026, IOI Properties had a net gearing ratio of 0.7 times — the highest among large-capitalisation property developers on Bursa — which is expected to breach 1.0 times upon completion of the acquisition.

Compared to the previous proposal, the hurdle for the acquisition has also been lowered as the latest transaction sidesteps the need for minority shareholders’ approval. Under the listing rules, a related-party transaction (RPT) requires shareholders’ approval at an extraordinary general meeting only when its prescribed percentage ratio breaches 5%.

Nevertheless, that does not change the fact that this remains an RPT — one that also allows Lee to shed a hefty S$217 million liability he had injected into Shenton 101.

This raises the bigger question of whether the arrangement ultimately works in the best interests of the group, especially given its aggressive acquisition spree in Malaysia and Singapore over the past few years.

Shenton House is slated for redevelopment into a mixed-use project comprising Grade-A offices, retail space and a luxury hotel, with a net lettable area of about 393,000 sq ft.

For IOI Properties, the real test is whether it can turn Shenton House into a successful commercial development without placing undue strain on its balance sheet.

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