PARIS: CapitaLand’s wholly owned lodging business unit, The Ascott Limited (Ascott), is investing S$192 million in a freehold serviced residence in the Central Business District of North Sydney through the Ascott Serviced Residence Global Fund (ASRGF)1, its global fund with Qatar Investment Authority (QIA).
To be named Citadines Walker North Sydney, the serviced residence is part of a 48-storey integrated development which also has office and retail components and will be the tallest tower in North Sydney upon its completion in 2021.
Ascott has announced this acquisition and the signing of 13 other properties under franchise and management contracts at the grand opening of La Clef Champs-Élysées Paris in France. La Clef Champs-Élysées Paris is also one of the assets invested by ASRGF, and comes under The Crest Collection, which comprises some of Ascott’s most prestigious and unique luxury serviced residences.
Other assets invested by ASRGF include Citadines Islington London which will open this November, as well as lyf Funan Singapore which has started operations since early September 2019.
Kevin Goh, Ascott’s Chief Executive Officer, said: “This latest acquisition in Australia is in line with our strategy of growing our fund management portfolio through private equity funds, joint ventures and listed hospitality trusts – all of which provide a core asset base for our asset management business. We believe in achieving scale in the business, and fund management is central to the active capital management strategy of Ascott as a dominant lodging real estate player. Ascott enjoys deep presence in many key gateway cities, across various lodging segments, from serviced residences, hotels, coliving apartments to leasing apartments. This provides a ready pipeline of assets like Citadines Walker North Sydney for capital deployment. We have an established owner-operator track record of creating value through sound asset management strategies as well as delivering robust and attractive risk-adjusted returns for our investors. Together with our capacity to co-invest with like-minded capital partners such as QIA, it gives us the ability to stay invested in quality assets for the long term.”
Goh added: “The recent proposed combination of our two hospitality trusts, Ascott Residence Trust and Ascendas Hospitality Trust, will cement Ascott Residence Trust’s position as the largest hospitality trust in Asia Pacific. With Ascott’s sponsored stake in the trust, we will continue to benefit from the properties’ steady yield and participate in their future growth. Likewise, the enlarged trust will continue to enjoy a pipeline of quality assets from Ascott.”
“At the same time, we can earn fund management fees to complement third-party management contracts and franchises which we are looking to scale up sharply over the next few years. As we continue to pursue proactive capital recycling and investment strategies, we will enlarge and enhance our portfolio of assets to increase our return on equity.”
With this latest acquisition in Australia as well as the signing of 13 management and franchise contracts across China, France, Indonesia, Kenya and Vietnam, Ascott has achieved S$10 billion in asset value3. These 14 new properties offer more than 2,200 units. Ascott has secured a total of over 10,600 units to date this year – double the number of units signed organically for the same period last year. Ascott has reached a total of more than 112,000 units in over 700 properties, on track to meet its global target of 160,000 units by 2023.