Ascott expands portfolio with 26 new properties

It has branched out into six cities such as Atyrau, Yokohama, Seongnam and Hoi An.

CapitaLand’s wholly owned lodging business unit, The Ascott, has enlarged its portfolio with 26 properties with over 6,000 units across 11 countries, an announcement revealed.

The properties, which will open in phases from 2019 to 2023, are mostly signed under management contracts, with three on franchise agreements. The majority of the 26 new properties are in Asia Pacific (APAC).

Also read: REITs and tech firms drive Singapore's M&A frenzy

With the new properties, Ascott has made inroads into six new cities across APAC, Central Asia and Africa, comprising Atyrau in Kazakhstan, Nairobi in Kenya, Yokohama in Japan, Seongnam in South Korea, as well as Cam Ranh and Hoi An in Vietnam.

Ascott has also expanded its select-service business hotel brand Citadines Connect to Bangkok in Thailand, after Australia and the US. Ascott also brought the hotel brands under TAUZIA, which it has a majority stake in, to countries such as Malaysia and Vietnam, beyond its predominantly Indonesia market.

To date, Ascott has signed contracts for over 40 properties with more than 8,000 units, an increase of over 40% in units compared with the same period in 2018. Ascott has also opened 16 properties with over 2,000 units, representing a 70% increase in operational units compared with 2018.

According to Kevin Goh, Ascott’s CEO, the firm’s operational units have contributed $59.7m of fee income in Q1.

“We are targeting to open over 40 properties with about 8,500 units this year. For every 10,000 serviced residence units signed, we are expecting to earn approximately $25m in fee income annually,” he said. “We are looking forward to the fee income boost when we achieve our target of 160,000 units worldwide by 2023.”

Meanwhile, with the recent completion of the Ascendas-Singbridge transaction, CapitaLand has become the sponsor of both Ascott Residence Trust (Ascott Reit) and Ascendas Hospitality Trust (A-HTRUST). Including the assets held under these two hospitality trusts, lodging assets under CapitaLand are valued at $31b, which is said to be equivalent to 25% of the group’s total assets under management (AUM).

Also read: Ascott REIT and Ascendas Hospitality Trust propose merger to create largest hospitality trust in APAC

Ascott has so far opened 16 properties in 2019, with more than 30 properties scheduled to open in H2. Ascott is also gearing up for the opening of its flagship coliving ‘lyf’ property, lyf Funan Singapore, in the city-state’s Civic and Cultural District in September 2019.