Ascott Expands Global Presence With 26 New Properties Across 11 Countries
Steady rise in recurring fee income and enlarged asset size strategically position lodging business as a growing contributor to CapitaLand’s earnings
Singapore - CapitaLand's wholly owned lodging business unit, The Ascott Limited (Ascott), is accelerating its growth globally with the signing of 26 properties with over 6,000 units across 22 cities and 11 countries. The properties, which will open in phases from 2019 to 2023, are mostly signed under management contracts, with three on franchise agreements.
Mr Kevin Goh, Ascott's Chief Executive Officer, said: "We are fast-expanding Ascott's global network of properties as we continue to pursue an asset-light business model to boost our recurring fee income. While we achieve strong momentum in expanding our global lodging business through strategic alliances, management contracts, franchise and leases, we are also accelerating the number of new property openings. For the first quarter this year, our operational units have contributed S$59.7 million of fee income. 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 S$25 million in fee income annually as the properties progressively open and stabilise. Through these growth strategies, we are looking forward to the fee income boost when we achieve our target of 160,000 units worldwide by 2023."
With the recent completion of the Ascendas-Singbridge transaction, CapitaLand through Ascott 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 assets1 under CapitaLand are valued at S$31 billion, equivalent to 25% of the Group's total assets under management. An announcement proposing to combine the two trusts has been made on 3 July 2019.
Mr Goh said: "The combination of Ascott Reit and A-HTRUST is a win-win for both unitholders as the combined entity will be Asia Pacific's largest hospitality trust with an asset value of S$7.6 billion, making it a lot more attractive to investors. A larger investment entity tends to trade better, as well as enjoy higher liquidity and greater cost efficiency. The combined entity will also have greater financial flexibility to seek more accretive acquisitions and value enhancements. Ascott as a sponsor can focus on growing and injecting our lodging assets into a single hospitality trust, and recycle capital into new development opportunities. At the same time, Ascott will continue to benefit and participate in the future growth of these quality assets through our sponsored stake in the trust."
The majority of the 26 new properties are in Asia Pacific, which continues to see strong demand for lodging in tandem with lower cost of travel, improving travel infrastructure and middle-class demographics' growing disposable income and aspiration to travel. By 2022, global lodging sales are forecast to reach US$812 billion, with Asia Pacific remaining the second largest market 2 . International tourist arrivals continue to be driven by stronger economic growth, more affordable air travel and a better visa regime3.
With these new properties, Ascott has made inroads into six new cities across Asia Pacific, Central Asia and Africa. It has forayed into 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 presence in 14 cities - Melbourne and Sydney in Australia; Chengdu, Dongguan, Guangzhou, Shanghai, Shenzhen, Wuhan and Xi'an in China; Bogor and Jambi in Indonesia; Cyberjaya in Kuala Lumpur; Cebu in the Philippines; and Bangkok in Thailand.
To cater to the burgeoning middle-class segment in the region, Ascott expanded its select- service business hotel brand Citadines Connect to Bangkok in Thailand, after Sydney in Australia and New York in the USA. 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. Ascott also signed its fifth Citadines property under its strategic alliance with Nasdaq-listed Huazhu Hotels Group (Huazhu) and Huazhu's subsidiary CJIA Apartments Group.
In addition to expanding its global footprint, Ascott is strengthening its international marketing network with Ascott Star Rewards - the world's first loyalty programme in the serviced residence industry to offer full flexibility to earn and redeem points. Member bookings have quickly tripled since the loyalty programme was launched in April 2019. Members of Ascott Star Rewards have a greater choice of properties across the globe as Ascott has opened 16 properties this year, with more than 30 properties scheduled to open for the rest of 2019. 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.
1. Include operating and pipeline properties owned/managed, as well as estimates of third-party owned assets in various stages of development.
2. "Trends in Global Travel and Lodging 2018" (2018), Euromonitor International
3. "International Tourism Results 2018 and Outlook 2019" (2019), World Tourism Organization
About The Ascott Limited
The Ascott Limited is a Singapore company that has grown to be one of the leading international lodging owner-operators. Ascott's portfolio spans more than 180 cities across over 30 countries in Asia Pacific, Central Asia, Europe, the Middle East, Africa and the USA.
Ascott has more than 66,000 operating units and close to 46,000 units under development, making a total of more than 112,000 units in over 700 properties.
The company’s serviced residence and hotel brands include Ascott, Citadines, Citadines Connect, Somerset, Quest, The Crest Collection, lyf, Préférence, Vertu, Harris, Fox, Yello and POP!.
Ascott, a wholly owned subsidiary of CapitaLand Limited, pioneered Asia Pacific’s first international-class serviced residence with the opening of The Ascott Singapore in 1984. Today, the company boasts over 30 years of industry track record and award-winning brands that enjoy recognition worldwide.
Ascott’s achievements have been recognised internationally. Recent awards include World Travel Awards 2019 for ‘Leading Serviced Apartment Brand’ in Europe and the Middle East; Business Traveller Asia-Pacific Awards 2019 for 'Best Serviced Residence Brand'; DestinAsian Readers’ Choice Awards 2019 for ‘Best Serviced Residence Brand’; and TTG China Travel Awards 2019 for ‘Best Serviced Residence Operator in China’.
For a full list of awards, please visit https://www.the-ascott.com/ascottlimited/awards.html.
About CapitaLand Limited
CapitaLand Limited (CapitaLand) is one of Asia's largest diversified real estate groups. Headquartered and listed in Singapore, it owns and manages a global portfolio worth over S$103 billion4 as at 31 March 2019. CapitaLand's portfolio spans across diversified real estate classes which includes commercial, retail; business park, industrial and logistics; integrated development, urban development; as well as lodging and residential. With a presence across more than 200 cities in over 30 countries, the Group focuses on Singapore and China as its core markets, while it continues to expand in markets such as India, Vietnam, Australia, Europe and the USA.
CapitaLand has one of the largest real estate investment management businesses globally. It manages eight listed real estate investment trusts (REITs) and business trusts as well as over 20 private funds. Since it pioneered REITs in Singapore with the listing of CapitaLand Mall Trust in 2002, CapitaLand's REITs and business trusts have expanded to include Ascendas Reit, CapitaLand Commercial Trust, Ascott Residence Trust, CapitaLand Retail China Trust, Ascendas India Trust, CapitaLand Malaysia Mall Trust and Ascendas Hospitality Trust.
Visit www.capitaland.com for more information.
Phone: +65 6713 2864