26 Apr

Ascott Secures Four Contracts in China With Investment Totalling Close To US$50 Million (RMB 400 million)

Ascott To Expand 3 Times In China By 2010

Shanghai, China, 26 April 2006 - The Ascott Group (Ascott) is aggressively expanding in China with four new contracts and adding two new cities, Xi’an and Hong Kong to its footprint in China. With these contracts, the Group intends to invest close to US$50 million (RMB 400 million) in China. This amount includes equity investment, building and fitting costs.

Mr Cameron Ong, Ascott’s Managing Director and CEO said: “Ascott currently has 12 properties with about 2,600 units in six cities in China. With the addition of these four new Citadines properties, we will enhance our position as the largest international serviced residence owner-operator in China with more than 3,000 units in 16 properties.”

“We aim to build a strong presence in the second-tier cities in mainland China and Hong Kong by tapping on the increase in domestic travel and growth in expatriate community with the Citadines brand. Our new project in Hong Kong marks Ascott’s entry into a key gateway city where we will be seeking opportunities for further expansion.”

Mr Ong added: “Our Citadines product which largely comprises studio and one-bedroom units will appeal to business travellers and expatriates who require short to medium term stay. The addition of these four new contracts brings Ascott’s Citadines portfolio in Asia to 1,290 units in eight Citadines-branded serviced residences to be opened. With Ascott’s aggressive expansion plans and commitment to grow its presence in China, we will be tripling our current portfolio of 3,000 units to 10,000 units by 2010.”

Citadines Xi’an Central
Ascott has signed a management contract with Shaanxi New Trend Real Estate Co Ltd to manage Citadines Xi’an Central for a period of 10 years, with an option to renew the contract for another 10 years. The property is a 133-unit serviced residence in Beilin District, Xi’an and is targeted to open in the second half of 2006. Ascott is also considering acquiring a majority stake in the project.

According to Statistics Bureau of Xi’an, Xi’an attracted 23.2 million domestic visitors in 2005, an increase of 12.8% over 2004. Utilised foreign direct investment in Xi’an grew 107% in 2005 over 2004, amounting to US$571 million (RMB 4.6 billion). This is the highest foreign direct investment among 15 second-tier provincial level cities in China. Currently, 3,000 expatriates are living and working in Xi’an.

Citadines Hongkong Tsimshatsui Ashley
Ascott has entered into a binding provisional sale and purchase agreement for a 36-unit serviced residence to be named Citadines Hongkong Tsimshatsui Ashley. Located in prime Tsim Sha Tsui, Kowloon, the property will be refurbished and is targeted to resume operations in the second half of this year. Ascott will be investing US$26.5 million (RMB 212.3 million or HK$205.5 million) in the project.

According to InvestHK, foreign direct investment in Hong Kong was US$35.9 billion (RMB 287 billion or HK$278.4 billion) in 2005, 6% increase from US$34 billion (RMB 272 billion or HK$263.6 billion) in 2004. Hong Kong is expected to remain an important gateway for foreign companies attracted to the increasing business opportunities in China. Demand for serviced residences is expected to grow in tandem with the influx of expatriates into Hong Kong and China. .

Citadines Suzhou Xinghai (formerly named Citadines Chongrui)
Ascott has acquired an 80% stake in the 167-unit Citadines Suzhou Xinghai from Suzhou Chong Rui New Century Real Estate Development Co Ltd. Ascott also has the option to acquire a further 15% in equity within one year from the date of the new business license issued by the Suzhou Administrative Bureau for Industry & Commerce. Ascott’s total investment including acquisition cost in the project is US$10 million (RMB 81 million).The property is targeted to open in the second half of 2006.

Citadines Suzhou Lejia
Ascott has acquired a land in Suzhou Industrial Park to build, operate and manage the 250-unit Citadines Suzhou, Lejia. The property, to be located between Xinhu Street and Xiandai Dadao, is targeted to open in the second half of 2008. Ascott’s total investment in the project is US$10.8 million (RMB 86.5 million).

Suzhou, the largest economy in Jiangsu Province, registered 15.3% increase in gross domestic product in 2005 over that of 2004. Suzhou Industrial Park has been acclaimed as one of the fastest growing and most competitive development zones in China and globally. Currently, 5,000 expatriates are living in Suzhou Industrial Park on long-term basis. The continuous development of projects in Suzhou Industrial Park will ensure a steady influx of expatriates and business travellers.

With these developments, Ascott has a total of six Citadines-branded properties in China and two in Bangkok. The Group has also expanded its presence to eight cities in China; its global footprint now spans 43 cities in 17 countries. Four other Citadines-branded serviced residences in Asia that Ascott has previously announced include Citadines Shanghai Jinqiao, (Ascott’s first Citadines branded serviced residence to open in Asia in June 2006), Citadines Suzhou Emerald City, Citadines Bangkok Sukhumvit Lake and Citadines Bangkok Sukhumvit Asoke. (Please refer to Annex A for more information on Ascott’s current four Citadines serviced residences in Asia.).

These transactions are not expected to have a material impact on the earnings per share and the net tangible assets per share of the Group for the financial year ending 31 December 2006.

Opening Speech by Mr Cameron Ong

Annex A - Ascott's Current Citadines Serviced Residences in Asia


About The Ascott Group

The Ascott Group is a leading international serviced residence company with close to 16,000 serviced residence units in key cities of Europe, Asia Pacific, and the Middle East.

Ascott's global presence spans 43 cities in 17 countries. These include London, Paris, Brussels, Berlin and Barcelona in Europe; Singapore, Bangkok, Pattaya, Hanoi, Kuala Lumpur, Tokyo, Seoul, Shanghai, Beijing, Xi’an and Hong Kong in Asia; Sydney, Melbourne and Auckland in Australia / New Zealand as well as Dubai in the Middle East.
Headquartered in Singapore, The Ascott Group pioneered Asia Pacific's first branded luxury serviced residence in 1984. The Group also established the world’s first pan-Asian serviced residence real estate investment trust, Ascott Residence Trust in 2006. Today, Ascott boasts a 21-year industry track record and serviced residence brands that enjoy recognition worldwide.

The Group operates three brands – The Ascott, Somerset and Citadines. Its achievements have been recognised internationally; it has clinched numerous prestigious awards including the 2006 ‘China’s Top 100 Serviced Apartments’ award, Korea Times’ ‘Best International Serviced Residence Brand’ award, the ‘Highly Commended Deluxe Accommodation’ award at the 2005 Tasmanian Tourism Awards, ‘Best Accommodation’ at the 2005 World Travel Awards, TTG Asia Media’s 2005 ‘Best Serviced Residence Operator’ award, and the Business Traveller Asia Pacific’s 2005 ‘Best Serviced Residence Brand’ and ‘Best Serviced Residence’ awards.

For a full list of awards, please visit: https://www.the-ascott.com/aboutus/awards_and_accolades.html?year=2007

Listed on the mainboard of the Singapore Exchange, Ascott is the serviced residence arm of CapitaLand Limited, one of Asia’s largest listed property companies. Headquartered in Singapore, the multinational company's core businesses in property, hospitality and real estate financial services are focused in gateway cities in Asia Pacific, Europe and the Middle East. Its property and hospitality portfolio spans more than 70 cities in 18 countries.

For reservations on Ascott properties, call Central Reservations on (65) 6272-7272 or visit www.the-ascott.com