After winning the auction for a Marina Bay mixed-use hotel and residential property, IOI Properties Group said Wednesday it is confident about the long-term feel of the Singapore property market.
Considering the crucial position of property in Singapore’s new downtown financial district, several observers were surprised that Boulevard View, a wholly-owned subsidiary of IOI Properties, was the only bidder when the state land auction ended last week. After much deliberation, the Urban Redevelopment Authority announced that the 99-year leasehold property will be awarded to Boulevard View Development Pte Ltd, who bid S$1.51 billion ($1.1 billion).
The property has a gross floor area of up to 101,629 square meters, of which 51,000 square meters will be utilized for residential purposes, 26,000 square meters for a hotel, and the remaining space may be used for offices, retail, and food and beverage outlets. In the shadow of the Asia Square office tower, close to the future Shenton Way MRT station, the location is ideal.
Because Marina One Residences was the last residential launch in the area in 2014, IOI expects its construction to satisfy a “pent-up demand” for city living options inside the CBD of Singapore, the company told Bursa Malaysia in a statement. This new hotel will be a valuable addition to the group’s investment properties portfolio in Singapore, as well as complement the group’s current projects in the city-state.
A total of 905 residential units and 540 hotel rooms were predicted by URA for the project. With a recent increase of Covid-19 cases, the hotel sector faces a difficult future even though home sales have recovered significantly this year.
Calvin Li, Singapore-based head of JLL Asia Pacific’s transaction advisory services for hotels and hospitality, said in an email that although uncertainty remains for the industry, the lengthy time horizon to completion of the construction is anticipated to alleviate short- to medium-term Covid-19 worries.
IOI stated in a statement that the project will take 84 months to complete, allowing the business flexibility in deciding on the product mix and launch date. There was also a statement that stated, “Singapore has a plan for moving towards endemic life with Covid-19.” The firm is bullish about Singapore’s property market‘s long-term prospects in light of this.
IOI will take on a second Marina Bay project, this time on Central Boulevard, where the company is also building a mixed-use commercial complex. At 2016, it paid S$2.6 billion in a public land auction to purchase the property.
One million square feet of office space and 30,000 square feet of retail and food and beverage outlets will be spread over two towers and a podium block by the time construction is finished in the third quarter of 2023, according to IOI’s website. The Raffles Place and Shenton Way MRT stations are connected to the office complex by link bridges.
According to Colliers Singapore’s managing director, “investor demand for both residential and commercial properties throughout Singapore remains strong on the basis of a gradual economic recovery.”
The mixed-use South Beach Development, developed by IOI and billionaire Kwek Leng Beng’s City Developments across Marina Bay, was completed by the partners in 2018. According to IOI’s executive vice chairman Lee Yeow Seng, the residential component of the project has sold 70% of the units at prices over S$3,000 per square foot.
Their father, Lee Shin Cheng, passed away in June of this year, leaving Yeow Seng and his brother Yeow Chor the palm oil and property business he grew up in. The brothers came in sixth place on a list of Malaysia’s 50 wealthiest people released in June of this year, with a combined net worth of $4.9 billion. IOI Corporation, a palm oil conglomerate, and IOI Properties, a real estate developer, were founded by their father, who had grown up on a rubber plantation in poverty. The IOI group includes the two firms mentioned above.
