CapitaLand’s serviced residence business unit The Ascott Limited (Ascott) is accelerating its expansion in Asia by partnering with developers in China, Japan and Thailand. In these strategic collaborations, the partners are expected to manage apartments currently under development as well as future projects. The move aims to boost Ascott’s portfolio expansion with more than 5,000 units added in the first quarter of 2018.
In China, Ascott has partnered with specialty township developer Riverside Group to launch serviced residences in Zhejiang, Chongqing and other key cities. The partnership will start with two serviced residences with a total of 350 units in Zhejiang and Chongqing. It follows Ascott’s contract with Riverside Group to manage the 190-unit Ascott Riverside Garden Beijing which opened in November last year.
In Japan, Ascott has entered a business cooperation with the listed Japanese real estate company NTT Urban Development Corporation (a subsidiary of Nippon Telegraph and Telephone Corporation) to jointly explore serviced residence opportunities in Japan and are currently working on two projects in Fukuoka and Yokohama.
In Thailand, Ananda Development has expanded into the serviced residence business through its alliance with Ascott. The first four properties under the collaboration – Somerset Rama 9 Bangkok, Ascott Embassy Sathorn Bangkok, Ascott Thonglor Bangkok and one more property in Sukhumvit 8 – will offer close to 1,500 apartment units in Bangkok when they open between 2020 and 2021.
Kevin Goh, Ascott’s chief executive officer, said: “Forming strategic cooperation with well-established developers is one of Ascott’s key strategies for growth. From Singapore to Australia, China, Indonesia, Japan and the Middle East, the alliances we have forged allow us to gain access to a variety of large-scale, quality projects to fast-track Ascott’s expansion and broaden our reach to even more gateway cities.
Having some of the biggest industry players choose to partner us speaks volume of Ascott’s reputation and expertise in managing award-winning serviced residences globally for over 30 years.”
“Forming strategic cooperation with well-established developers is one of Ascott’s key strategies”
“Leveraging Ascott’s global network of close to 100,000 corporate clients, we will create significant cross-marketing opportunities across the globe for our properties to maximise returns for our partners. We are confident of achieving our global target of 80,000 units this year, and to double our portfolio to 160,000 units by 2023. We will continue to scale up through investments, strategic alliances, management contracts, leases and franchises,” Goh said.
In addition to the 1,607 units that expanded its portfolio in January and February, Ascott is adding management and lease agreements for another 14 properties with about 3,400 apartment units across 10 cities in China, Japan, Thailand and Indonesia this quarter. This includes a lease agreement with department store chain, Takashimaya Company, Limited to operate the first Citadines Apart’hotel in Osaka.
Slated to progressively open from this year to 2021, these newly signed properties will mark Ascott’s maiden entry into Dongguan and Huizhou in China’s fast-developing Greater Bay Area, as well as deepen Ascott’s presence in China, Japan, Thailand and Indonesia.
“In the first quarter of 2018, we have added over 5,000 units to Ascott’s portfolio – more than 300% growth on a year-on-year basis”
Goh added: “Serviced residences are in high demand in many parts of the world. In the first quarter of 2018, we have added over 5,000 units to Ascott’s portfolio – more than 300% growth on a year-on-year basis. China remains our top source market globally with the Chinese constituting almost a quarter of our customers and growing. Our latest expansion with eight new contracts across seven cities in China will further boost Ascott’s dominance in the market.”
In Japan, Ascott has more than 3,100 units in 24 properties across eight cities. In addition to the upcoming first Citadines Apart’hotel in Osaka, Ascott operates seven other serviced residences and 16 properties for corporate lease in the country.
According to the latest JETRO Invest Japan Report, Japan’s net inflows of foreign direct investment reached a record high and demand for serviced residences is likely to grow with the government’s proactive efforts to attract investment.
Ascott is the largest international serviced residence owner-operator in Thailand and Indonesia. In Thailand, Ascott has 21 properties offering over 4,300 units across Bangkok, Pattaya and Sri Racha. In Indonesia, with the addition of Somerset Asia Afrika Bandung that is opening in 2019, Ascott will have over 3,000 units in 17 properties across seven cities.