Ascott Inks AUD500 Million Strategic Partnership With Quest In Australia
Ascott acquires a 20% stake in Quest for AUD28.8 million
Singapore, 23 October 2014 – CapitaLand’s wholly-owned serviced residence business unit, The Ascott Limited (Ascott) – the world’s largest international serviced residence owner-operator, has entered into a strategic partnership with Quest Serviced Apartments (Quest) – the largest serviced apartment provider with 112 properties in Australia.
Ascott expects to invest up to AUD500 million (S$560 million1) to acquire new properties that Quest will secure for its franchise in Australia over the next five years. Ascott will have a right of first refusal to acquire the properties sourced by Quest. Quest will then provide a lease for the properties, which will be operated under franchises using the Quest brand.
In addition, Ascott has signed an agreement to acquire a 20% stake in Quest for AUD28.8 million (S$32.3 million1). As part of the agreement, Ascott has the option to increase its stake in Quest to 30%.
In a separate agreement with Quest, Ascott’s real estate investment trust, Ascott Residence Trust (Ascott Reit), will acquire three operating serviced residences in Greater Sydney from Quest for AUD83 million (approximately S$93 million1). Quest Sydney Olympic Park, Quest Campbelltown and Quest Mascot will continue to be operated under franchises using the Quest brand.
Mr Lee Chee Koon, Ascott’s Chief Executive Officer, said: “Ascott has an established presence in Australia where our serviced residences enjoy a strong demand from travellers to the country, and we see vast potential growth opportunities for serviced residences. Serviced apartments represent over 25% share of the accommodation market in Australia where Quest is a leading player. Ascott has many global customer accounts and strong global systems to manage our properties. Through our strategic partnership with Quest, we can leverage each other’s knowledge and contacts in Australia to rapidly extend our presence in the growing market for international quality serviced apartments. We also expect a stronger pipeline of properties in Australia for Ascott to acquire.”
Mr Lee said: “The Australian accommodation sector continues to expand with more than 100 properties expected to be opened over the next few years. Foreign investment in Australia’s accommodation sector has been on the increase in recent years due to the reliable legislative environment, resilient economy and stable returns in Australia. Ascott and Quest have complementary strengths and confidence in providing quality serviced residences as an alternative to traditional hotels to discerning travellers for business or leisure. We look forward to closer collaboration with Quest in cross selling, conducting joint marketing initiatives, and jointly exploring opportunities for franchises outside of Australia.”
Mr Lee added: “We have formed strategic alliances with leading developers such as Vanke and Yuexiu to combine our expertise to drive Ascott’s growth in China. Our partnership with Quest is another strategic move that will further propel Ascott’s growth. Besides Australia, we will seek investment opportunities in key markets where we have presence such as Singapore, India, capital cities in Southeast Asia, Paris, London and key cities in Germany. We will also continue to expand through management contracts, strategic alliances and franchises to achieve our target of 80,000 apartment units globally by 2020.”
Mr Paul Constantinou, Chairman of Quest Serviced Apartments, said: “Quest is the fastest growing and largest network of serviced apartments in Australia. As one of the global leaders in franchising within the accommodation sector, we have opened an average of eight new properties each year. There is now the opportunity to accelerate our growth to secure 250 properties across Australia and New Zealand before the end of this decade.”
Mr Constantinou added: “Quest brings franchising experience and expertise to this partnership, whilst Ascott offers a global presence, and longevity in the industry. This partnership offers both parties the opportunity to broaden a highly successful franchising model to other parts of the world.”
“More than 80% of our customers are corporate travellers from some of Australia’s biggest companies and our properties are located in underserved regions with high demand for quality accommodation. We are stringent in selecting our franchisees and are actively involved in the operations and growth of every property. Having a global brand like Ascott partner with us is further affirmation of the strong reputation Quest has built over the last 25 years,” Mr Constantinou said.
In Australia, Ascott currently operates five serviced residences with more than 670 apartment units. Quest has around 150 properties with over 8,000 existing units in Australia, New Zealand and Fiji, and a further 1,500 units under construction.
1 Based on exchange rate of AUD1.00 = S$1.12.
About The Ascott Limited
The Ascott Limited is a Singapore company that has grown to be the world's largest international serviced residence owner-operator. It has over 24,000 operating serviced residence units in key cities of Asia Pacific, Europe and the Gulf region, as well as over 11,000 units which are under development, making a total of more than 36,000 units in over 200 properties.
The company operates three brands – Ascott, Citadines and Somerset. Its portfolio spans 85 cities across 24 countries, 22 of which are new cities in Ascott’s portfolio where its serviced residences are being developed.
Ascott, a wholly-owned subsidiary of CapitaLand Limited, pioneered Asia Pacific’s first international-class serviced residence with the opening of The Ascott Singapore in 1984. In 2006, it established the world’s first Pan-Asian serviced residence real estate investment trust, Ascott Residence Trust. Today, the company boasts a 30-year industry track record and award-winning serviced residence brands that enjoy recognition worldwide.
Ascott’s achievements have been recognised internationally. Recent awards include World Travel Awards 2013 for ‘World’s Leading Serviced Apartment Brand’ and ‘Leading Serviced Apartment Brand’ in Asia and Europe, Business Traveller Asia-Pacific Awards 2014 for ‘Best Serviced Residence Brand’ and ‘Best Serviced Residence’, Business Traveller China Awards 2013 for ‘Best Serviced Residence Brand’, Business Traveller UK Awards 2013 for ‘Best Serviced Apartment Company’, TTG China Travel Awards 2014 for ‘Best Serviced Residence Operator in China’ and DestinAsian Readers’ Choice Awards 2014 for ‘Best Serviced Residence Brand’.
About Ascott’s 30th Anniversary
2014 marks Ascott’s 30th Anniversary. To celebrate 30 years of hospitality excellence, Ascott has introduced a series of promotions to thank customers for their support. Customers can look forward to free stays and Ascott online members will enjoy at least 30% off Best Flexible Rates at participating properties in over 30 cities worldwide. Corporate clients who are members of Ascott’s rewards programme, The Link Club, can get 30% off redemption points where they will enjoy privileges such as dining, shopping and travel. For details on the promotions, terms and conditions, and reservations, visit www.the-ascott.com/30years.
About CapitaLand Limited
CapitaLand is one of Asia’s largest real estate companies. Headquartered and listed in Singapore, the company’s businesses in real estate and real estate fund management are focused on its core markets of Singapore and China.
The company’s diversified real estate portfolio primarily includes integrated developments, shopping malls, serviced residences, offices and homes. The company also has one of the largest real estate fund management businesses with assets located in Asia. CapitaLand leverages its significant asset base, real estate domain knowledge, product design and development capabilities, active capital management strategies and extensive market network to develop real estate products and services.
CapitaLand’s listed real estate investment trusts are Ascott Residence Trust, CapitaCommercial Trust, CapitaMall Trust, CapitaMalls Malaysia Trust and CapitaRetail China Trust.
About Quest Serviced Apartments
Quest is the largest and fastest growing serviced apartment operator in Australasia with around 150 properties located across Australia, New Zealand and Fiji.
Established in Melbourne, Victoria in 1988, the growth of Quest has been achieved through its commitment to meeting the accommodation needs of the extended stay business traveller.
Holding a strong leadership position, Quest has been recognised by both the accommodation and franchising industries. The company’s awards include Quest Founder and Chairman, Paul Constantinou’s induction into the HM Hall of Fame at the 2014 Hotel Management Awards, ‘Australasian Hotelier of the Year’ at the 2012 Hotel Management Awards, ‘Inaugural Innovators Award’ at the 2012 Australian and New Zealand Pacific Hotel Investment Conference and ‘National Customer Focused Franchise Award’ at the 2010 Customer Service Institute of Australia’s Australian Service Excellence Awards.
Quest Serviced Apartments’ properties are managed by franchisees who follow a proven and successful franchise model.
For more information on Quest Serviced Apartments, go to www.questapartments.com.au.