Ascott to acquire Somerset Central in Vietnam for US$9.45 million

Ascott will also open Somerset Danang Bay and Somerset Saigon Ho Chi Minh City by 2014.

According to a release, CapitaLand’s wholly-owned serviced residence business unit, The Ascott Limited (Ascott), has entered into a conditional joint venture agreement with Thuy Duong Investment Joint Stock Company whereby Ascott will acquire a 90% stake in Somerset Central TD Hai Phong City, Vietnam for US$9.45 million (S$11.4 million).

Ascott was awarded the management contract for the 132-unit Somerset Central TD Hai Phong City in 2009 by Thuy Duong Investment Joint Stock Company, an established real estate company with developments across Vietnam‟s major cities. The acquisition of Somerset Central TD Hai Phong City will allow Ascott to take control of the development and enhance the value of the serviced residence.

Somerset Central TD Hai Phong City will be the first international brand of serviced residence in Hai Phong when it opens in the second half of 2012. Besides Somerset Central TD Hai Phong City, Ascott will be opening Somerset Danang Bay and Somerset Saigon Ho Chi Minh City in Vietnam by 2014. As the largest international serviced residence owner-operator in Vietnam, Ascott currently operates over 860 apartment units across six properties (four properties in Hanoi and two in Ho Chi Minh City).

Mr Lim Ming Yan, Ascott‟s Chief Executive Officer, said: “Our strategy for Southeast Asia is to invest in key cities with strong potential for serviced residences. Vietnam is one of our key markets in Southeast Asia and we hold a long-term view of our investments in the country. Vietnam‟s probusiness regulatory environment and growing educated workforce will continue to attract multinational companies to set up operations. This will in turn generate demand for serviced residences. We are glad to be able to add Somerset Central TD Hai Phong City to our portfolio of quality properties.”

Mr Alfred Ong, Ascott‟s Managing Director for Southeast Asia and Australia, said: “The development of Hai Phong is one of the Vietnamese government‟s top priorities and its GDP is projected to grow by about 13% over the next five years. As foreign direct investments increase and the city expands its industrial and export processing zones, demand for quality accommodation will rise." 

"By investing in Somerset Central TD Hai Phong City, we will be able to gain first mover advantage as there is no international serviced residence in Hai Phong. Besides opening three more properties in Hai Phong, Danang and Ho Chi Minh City in the coming years, we are constantly looking for investment opportunities and management contracts to strengthen Ascott‟s leadership position in Vietnam,” he added.