Finance

CDL to Sell Majority Stake in Iconic S$2.75 Billion South Beach Development: What You Need to Know

2025-06-04

Author: Sarah

CDL Makes Bold Move to Sell Majority Stake

City Developments Limited (CDL), a cornerstone of Singapore's real estate market, is set to offload its majority share in the renowned South Beach development. This strategic move is aimed at slashing debt and restoring investor trust following a tumultuous family feud.

The Deal: What’s at Stake?

Sources indicate that CDL plans to sell its 50.1% stake in the South Beach project to its minority partner, IOI Properties Group, effectively handing full ownership over to the Malaysian developer. The transaction is valued at a staggering S$2.75 billion.

Why Sell? Pressure from Family Feuds and Investor Worries

CDL has found itself under increasing pressure to divest assets, especially in light of a public rift within the influential Kwek family, which controls the firm. Despite reconciling with his father and chairman, Kwek Leng Beng, CEO Sherman Kwek disclosed that the family discord has dampened shareholder confidence, prompting a renewed focus on reducing the company's expanding debt.

What’s Next for CDL?

This deal enables CDL to meet its commitment to surpass the approximately S$600 million in asset sales achieved in 2024, falling short of a more ambitious S$1 billion target.

A Closer Look at the South Beach Complex

Nestled in Singapore's bustling central business district, the South Beach development is a mixed-use marvel featuring retail spaces, a 34-storey office tower, and a luxurious JW Marriott Hotel housed within a 45-storey building. Designed by the acclaimed Norman Foster architectural firm, it has witnessed significant ownership transitions over the years.

The Growing Power of IOI in Singapore's Market

This acquisition will bolster IOI's footprint in Singapore, complementing its diverse portfolio that includes residential developments as well as the recently inaugurated IOI Central Boulevard Towers. Controlled by the Lee family, IOI initially made its mark in the palm oil industry and has since expanded its horizon in real estate.

Historical Context: A Project with a Bumpy Past

CDL originally acquired the South Beach site in 2007 for nearly S$1.7 billion alongside Dubai World and El-Ad Group. However, a lag in construction due to the global financial crisis led to the exit of its partners, leaving IOI with a minority stake since 2011.

Tenant Changes and Market Dynamics

Rounding out the complex's story, major tenant Meta Platforms vacated its seven floors in the office tower last year, contributing to a decline in occupancy rates from 94.4% at the end of the previous year to 92.4% as of March.

Stocks Respond Favorably Before Trading Halt

In response to this news, shares of CDL surged by 1.64% before being halted, showcasing the market's optimistic outlook on this pivotal transaction.