CapitaLand and IOI Negotiate S$2.4 Billion One Raffles Place Buy

CapitaLand Investment and Malaysia's IOI Properties Group are in advanced negotiations to acquire One Raffles Place in Singapore for approximately S$2.4 billion ($1.9 billion), according to reports in Bloomberg and The Star. The prime Central Business District complex comprises two office towers of 62 and 38 floors along with a retail podium. The potential vendors include OUE REIT, which controls an effective 67.95% interest in the complex via an 83.33% stake in OUB Centre Limited, and United Overseas Bank, which holds a direct 18.46% stake. The remaining equity in the holding structure is held by minority owners UOL Group and Khattar Holdings.

The target consideration of S$2.4 billion values the prime central property against a broader backdrop of institutional liquidity returning to core Singapore real estate. The proposed transaction follows an earlier deal on April 20, 2026, when IOI Properties Group agreed to acquire the 773,460-square-foot Asia Square Tower 2 from CapitaLand Integrated Commercial Trust for an agreed property value of S$2.476 billion. That prior acquisition established a benchmark for prime commercial office pricing in the precinct, positioning IOI Properties Group and CapitaLand as recurring counterparties in large-scale Singapore commercial transactions.

Scale of the market recovery

The prospective S$2.4 billion transaction comes after a sharp rebound in commercial property transactions across the city-state. According to figures from JLL and Savills, Singapore's office investment sales volume reached a three-year high of nearly S$4 billion in full-year 2025. Total real estate investment sales across all asset classes in Singapore expanded by 27% year-on-year to reach S$34.12 billion in 2025, up from S$26.87 billion recorded in 2024.

If completed at the negotiated S$2.4 billion valuation, the purchase of One Raffles Place would account for more than half of the total full-year 2025 Singapore office investment volume in a single transaction. The scale of the acquisition underscores how institutional deal-making in Singapore commercial real estate is concentrating within mega-ticket CBD assets, driven by regional asset managers re-entering prime commercial real estate following corporate portfolio rationalisations.

Tenures and planning constraints

The physical and legal structure of One Raffles Place involves complex title and planning characteristics that shape its pricing. According to reports in The Business Times, The Edge Singapore and Bloomberg, One Raffles Place stands on four distinct land parcels featuring split leasehold tenures. One parcel holds an 841-year leasehold starting in November 1985, whereas three other parcels carry 99-year leaseholds that expire in the 2080s.

In addition to the split land tenure, the complex presents distinct planning parameters under local zoning rules. According to reports in The Edge Singapore and Bloomberg, the current gross floor area ratio of One Raffles Place stands at approximately 17x. This existing density exceeds the standard 15.0 gross plot ratio limit mandated under the Urban Redevelopment Authority Master Plan. Any redevelopment or restructuring proposal must therefore navigate density restrictions alongside non-uniform lease expirations.

Implications for capital allocations

For cross-border investors and asset managers, the joint bid by CapitaLand Investment and IOI Properties Group illustrates a structural preference for co-investment models when underwriting multi-billion-dollar commercial assets. On our reading, pairing a regional developer with a local capital manager allows both parties to distribute balance sheet exposure while securing management fees and operational control over prime CBD inventory.

The transaction also marks a notable capital recycling event for the vendors. OUE REIT, which is controlled by Indonesia's Riady family, holds its effective 67.95% interest in One Raffles Place through OUB Centre Limited, while United Overseas Bank holds its direct 18.46% stake alongside minority owners UOL Group and Khattar Holdings. A successful disposition at the S$2.4 billion negotiation figure allows these incumbent owners to liquidise mature office holdings that require future capital expenditure.

Redevelopment liability and lease decay

The central counter-argument to the proposed S$2.4 billion valuation rests on the substantial long-term capital expenditure and lease-decay risks inherent in the asset. Prospective buyers face major redevelopment capital outlay because the 1980s-era complex carries decaying 99-year leasehold terms expiring in the 2080s on one office tower and 75% of the retail podium, according to analysis in The Edge Singapore and Bloomberg.

For the buyers' underwriting to yield expected target returns, CapitaLand Investment and IOI Properties Group must either secure regulatory approvals for lease top-ups or successfully execute intensive asset enhancement initiatives on a 1980s-era building. If planning authorities enforce the Urban Redevelopment Authority Master Plan baseline gross plot ratio of 15.0 during a future total redevelopment, the owners could face a net loss in overall gross floor area relative to the current ~17x ratio. That structural risk represents a material counterweight to the headline asset price.

Milestones to completion

The transaction process was formally initiated earlier in the year. On February 20, 2026, OUE REIT confirmed in a Singapore Exchange filing that OUB Centre and United Overseas Bank had formally appointed joint advisors CBRE and JLL to conduct a joint market-testing exercise to sell 100% of One Raffles Place, according to disclosures filed with the SGX and reported by The Business Times.

Market participants will watch for formal binding sales and purchase agreements from CapitaLand Investment and IOI Properties Group, which will reveal the definitive debt-to-equity ratios, exact pricing per square foot, and leasehold top-up arrangements agreed with regulatory bodies. The execution of the deal will confirm whether institutional liquidity can successfully absorb legacy 1980s office assets burdened by split leasehold tenures.