IOI Properties pursues Chijmes and Capitol Kempinski acquisitions

Chijmes and the Capitol Kempinski hotel in Singapore are acquisition targets for Malaysia’s IOI Properties Group, chief executive officer Lee Yeow Seng said. The company is undertaking due diligence alongside exclusive negotiations. Lee withheld the proposed purchase price while discussions continue.

People familiar with the matter said Perennial Holdings had marketed the hotel at approximately S$600 million. A valuation at the close of 2025 put Chijmes at S$379 million. Perennial’s interests amount to about one-third of Chijmes and approximately 80 per cent of Capitol Singapore, which includes the hotel, retail space and residential units. Perennial representatives did not respond to requests for comment.

Lee said IOI was discussing the introduction of high-end fashion brands at Chijmes to lift rental income. The company also wants to replace Kempinski with an international ultra-luxury hotel brand.

IOI’s Singapore commercial holdings reached S$10 billion following purchases including Asia Square Tower 2 and the remaining ownership of South Beach. At end-June, net debt amounted to 85 per cent of equity. Lee’s goal is a ratio of 30 to 50 per cent within three to five years.

A planned private fund is central to that debt-reduction effort. Lee said it would be established in two months, with former Pimco Prime Real Estate executive Varun Singh overseeing it. South Beach’s office space and IOI Central Boulevard Towers would form its initial S$6 billion portfolio.

Lee said prospective investors included insurers, sovereign wealth funds and private equity firms. IOI intends to reduce its ownership in the assets to roughly half, offering holdings starting at about S$500 million and a lockup lasting five to seven years. The fund seeks an internal rate of return between 10 and 11 per cent, with distributions twice yearly. IOI plans to add further Singapore assets and eventually pursue a Reit listing.