Ioi Properties Receives Proposal Ceo Jointly Develop Shenton House Singapore
and plot ratio bonusKUALA LUMPUR (June 25): IOI Properties Group Bhd (KL:IOIPG) has received a proposal from its group chief executive officer cum major shareholder Lee Yeow Seng to participate in the development of Shenton House, a commercial property located in Singapore that his private vehicle has successfully tendered for, for S$538 million (RM1.9 billion). According to a bourse filing, Yeow Seng has proposed that IOIPG acquire all or part of his private vehicle, Shenton 101 Pte Ltd, which is planning to redevelop Shenton House, works for which are scheduled to start at the end of 2025. This is to address and mitigate the potential conflict of interest that will arise due to his role in the redevelopment of Shenton House through Shenton 101, in which he is the sole shareholder. The intention of the proposal is to align the interests of IOIPG with that of Shenton 101, which will hold the redeveloped property as investment upon its successful redevelopment. Yeow Seng and his brother Datuk Lee Yeow Chor are major shareholders of IOIPG through their substantial shareholdings in Vertical Capacity Sdn Bhd, which holds 65.67% in IOIPG. Shenton House covers 3,377 square metres and is designated for commercial use with a gross plot ratio (GPR) of 11.2. The property has a 44-year land lease, with the potential to be extended to a fresh 99-year lease. The current additional existing capital commitment — excluding the development cost, which is to be finalised — is S$476 million, which includes land betterment premium, lease top-up premium, and transaction expenses. Further, according to the Singapore’s central business district incentive scheme, Shenton House is eligible for a 25% bonus gross floor area which can be redeveloped into a mixed-use commercial with residential development or a hotel at the GPR of 14. As such, Yeow Seng has emphasized the need to develop the property and extend the lease to maximise its potential. This proposal is valid for four months, which may be extended by another two months if a written request is received from IOIPG. The good faith intention of Yeow Seng is not to make a personal gain arising from the proposal. As such, the consideration will include the initial cost of investment of equity in Shenton 101 and the cost incurred by Shenton 101 for the acquisition of Shenton House and any upfront costs incurred by Shenton 101 such as consultants’ fees, expenses, tender, application, and approval costs, as well as the cost of finance. IOIPG is considering the proposal and will make an announcement once a decision has been reached. At market close on Tuesday, IOI Properties’ shares dropped four sen or 1.75% to RM2.25, bringing the company a valuation of RM12.39 billion.
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