The Ascott Limited Secures New Serviced Apartment Project In Beijing
Proposed Beijing Project latest to join The Ascott Ltd's chain of serviced residences
The Ascott Ltd, the listed serviced residence arm of DBS Land, announced today that it has signed a 10-year management agreement to manage Fortune Garden, a residential-cum-serviced apartment project currently under development in the prime Lufthansa CBD area in Beijing. The management contract comes with an option for The Ascott Ltd to extend the term for another 10 years upon expiry of the initial term.
The property, comprising 166 serviced residence units will be the latest addition to The Ascott Ltd's portfolio of 12 serviced residences increasing its units under management to over 2800. Scheduled to receive its first guest in August 2001, it will be The Ascott Ltd's first serviced residence in Beijing.
The developer of the project, Beijing Xin Lian Xie Real Estate Development Co. Ltd, is a joint venture company between China Resources Corporation (10%), New Legend (USA) International Inc (89%) and Beijing Capital Engineering Co. Ltd (1%). The majority shareholder, New Legend (USA) International Inc, is a subsidiary of New Legend International, whose main activities are property development, trading, import and export, finance, information system and electronics. China Resources Corporation is one of the largest state-owned enterprises in China whose main business focus is trading.
As part of the deal, The Ascott Ltd has also accepted the developer's offer to buy 16 units of serviced apartments for a total consideration of approximately US$5 million. The Ascott Ltd will inject an additional US$1.23 million to fit-out the units for serviced apartment operations.
Mr Benett Theseira, Senior Vice President, Business and Brand Development of The Ascott Ltd, was upbeat about the outlook for the serviced apartment market in Beijing. He said, "The demand for serviced apartments Beijing is expected to grow steadily over the next few years as China continues to open up its markets, particularly with its entry into WTO. More MNCs, especially those in telecommunications and IT are expected to enter the market and seek to expand their operations in China, particularly in the major business centres of Beijing and Shanghai. All these point to strong growth in demand for quality serviced residences. We are entering the market at the right point of the cycle."
The Ascott Ltd's foray into the Beijing serviced residence market is in line with its aim of expanding geographical spread and establishing a presence in key gateway cities. Mr Theseira added, "As Fortune Garden is expected to be operational by August 2001, we will be able to gain a quick entry into Beijing and serve the growing demand for quality serviced apartments within the Lufthansa CBD area which is popular with expatriates."
The project is also expected to complement The Ascott Ltd's two projects in Shanghai, the Stamford Court Xu Hui which has recently soft- opened and The Ascott Pudong, expected to open early next year.
In July this year, The Ascott Ltd and Somerset Holdings Ltd has proposed a merger that will be decided by their shareholders on 23 and 25 October at their respective Extraordinary General Meetings. If approved, the merged entity will have a strong foothold in Beijing with two serviced residences comprising a total of 438 units. In February this year, Somerset Holdings Ltd purchased two blocks of apartments in the Onward Science Building in the prime World Trade Centre commercial area in Beijing and is currently in the midst of converting these units into a 5- star serviced apartment.
The Ascott Ltd, a public-listed associated company of DBS Land Limited, is the pioneer of the purpose-built luxury serviced residence concept in the Asia Pacific in the 1980s. With over $550 million in assets, The Ascott Limited owns or manages over 2,800 units of quality serviced residences in United Kingdom, Singapore, China, Malaysia, Thailand, Vietnam, Indonesia and Philippines. Since the opening of The Ascott Singapore in 1984, The Ascott Ltd has more than 15 years of experience as a serviced apartment operator and is well positioned to meet its goal of becoming a global serviced residence company.
Fortune Garden is located in the prime Lufthansa commercial-cum- residential district in the Beijing CBD, within close proximity to the 5- star Kempinski Hotel, Lufthansa International Centre and the Beijing International Clinic. It is also directly opposite the new 3rd Embassy area and the German International School. The Lufthansa CBD area is the most preferred commercial and residential district for expatriates in Beijing. This area is close to prime commercial developments, three 5-star hotels, the friendship store, numerous F&B and entertainment outlets such as the Hard Rock Café and international schools. Besides being next to the 3rd Embassy area, it is also minutes away from the 1st and 2nd Embassy areas. The World Trade Centre commercial area and the Beijing International Airport are also within 20 minutes' drive away via the East Third Ring Expressway. Fortune Garden is a project comprising two 26-storey tower blocks with a total floor area of 50,678 sqm. One tower in the development has been earmarked as foreign sales apartments. The remaining tower, Stamford Court Beijing will be managed by The Ascott Ltd and held for long-term investment. The serviced apartment component comprises 166 apartments and will have comprehensive clubhouse facilities including an indoor swimming pool, spa, sauna rooms, a fully-equipped gymnasium and an exclusive tenants' lounge.
Assistant Manager Corporate Communications
The Ascott Limited
Tel: (65) 739 6141 Fax: (65) 737 0019