City Developments Ltd (CDL) has agreed to offload its majority interest in one of Singapore’s most recognizable office developments, as part of efforts to cut debt and restore investor confidence in the aftermath of a high-profile family dispute.
According to a person familiar with the matter, CDL will divest its 50.1% stake in the South Beach development to its current minority partner, IOI Properties Group Bhd. The Malaysian property developer will become the sole owner of the prime commercial asset once the deal is finalized.
“The deal values the complex at about S$2.75 billion (US$2.1 billion),” the source said, requesting anonymity due to the private nature of the information.
A representative from IOI declined to comment on the transaction, and CDL did not immediately respond to an emailed inquiry.
CDL’s shares rose approximately 1.6% prior to a trading halt early Wednesday, pending an official announcement.
The planned divestment comes amid mounting pressure on CDL to pare down its asset portfolio following internal turbulence that split the Kwek family—Singapore’s wealthiest clan. Though ties have since been mended between CDL Chairman Kwek Leng Beng and his son, CEO Sherman Kwek, the episode shook investor sentiment.
In April, Sherman Kwek acknowledged the damage to shareholder confidence and emphasized that “reducing the growing debt load is a priority.”
The sale will contribute significantly to CDL’s goal of exceeding last year’s asset disposal total of around S$600 million, which fell short of its original S$1 billion divestment target.
South Beach, located in Singapore’s central business district, is a mixed-use development comprising a 34-story office tower, a 45-story JW Marriott Hotel, and accompanying retail space. Designed by the acclaimed Norman Foster-led architecture firm, the site has seen several changes in ownership over the years.
CDL originally acquired the land parcel in 2007 for nearly S$1.69 billion, alongside two international partners—Dubai World Corp and El-Ad Group Ltd. The global financial crisis delayed construction, prompting the partners to exit, with IOI later acquiring a minority stake in 2011.
A 2023 biography noted that the elder Kwek had resisted granting IOI an equal stake at the time, determined to retain control over the project.
IOI’s acquisition of South Beach will further entrench its presence in Singapore’s property market. The Malaysia-listed firm, controlled by the Lee family—whose fortune stems from the palm oil industry—also owns residential developments and the newly launched IOI Central Boulevard Towers, a prominent office complex in the city center.
Despite its prestige, South Beach has faced some leasing headwinds. Major tenant Meta Platforms Inc vacated seven floors in the office tower last year. As of March, occupancy stood at 92.4%, down from 94.4% at the end of 2024.
-Bloomberg
