CapitaLand’s wholly owned serviced residence business unit, The Ascott Limited (Ascott), races ahead by securing contracts to manage six properties with more than 1,200 apartment units in China, on the back of record growth last year. The new properties entrench Ascott’s presence in Changsha, Shenzhen, Tianjin and Wuhan, while extending its footprint to two more cities – Handan and Xuzhou. Ascott is also poised to boost its fee income by opening an all-time high of more than 30 properties worldwide this year, of which 16 will be in China, as it further cements its leading position in the industry.
Mr Lee Chee Koon, Ascott’s Chief Executive Officer (CEO), said: “Ascott crossed the 50,000- unit milestone last year, and there will be no let-up in our efforts to build up Ascott’s global scale and accelerate our growth in 2017. By expanding our network, the management fees we get over time will strengthen Ascott’s earnings profile to deliver sustainable returns and drive return on equity. We clinched a record 10,000 units in 2016 and this is expected to contribute S$25 million to S$30 million of fee income to Ascott annually as the properties progressively open and stabilise. As we expand across our different brands to offer more accommodation choices and tailored experiences to our customers internationally, we are confident of achieving our global target of 80,000 units by 2020.”
Mr Lee said: “In addition to management contracts, we will continue to seek acquisitions and franchises. We will also look at ways to strengthen our edge by transforming Ascott’s business, and forming strategic alliances with leading tech-players, property developers and capital partners. Having greater scale gives us a stronger negotiating power with partners and vendors. It will also enable us to better invest in capabilities such as technologies and new systems to enhance our competitiveness.”
Mr Tan Tze Shang, Ascott’s newly appointed Managing Director for China, said: “China is Ascott’s fastest-growing and largest market. Ascott’s strategic investment in Tujia has spurred our growth in China and expanded our reach to more customers through online and offline channels. Our bookings in China have increased through Tujia’s website and we will be able to cater to the rapidly growing outbound Chinese travellers with the listing of our properties worldwide on the website by the first half of this year. Since the launch of our Tujia Somerset brand last year to tap on the booming middle-class segment, we have secured 11 properties and surpassed our 2016 target of 2,000 units under this brand.”
Mr Tan added: “To ride on the growth in demand for international-class serviced residences as we work towards our goal of 20,000 units in China by 2020, we will expand our management and franchise business through our established Ascott, Citadines and Somerset brands, Tujia Somerset, as well as our newly unveiled lyf brand designed for and managed by millennials. We will also look out for investments opportunities in the first tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, as well as in provincial capitals like Wuhan and Hangzhou.”
In China, Ascott is one of the leading international serviced residence owner-operators with more than 17,300 units in 96 properties across 27 cities. Of the six new serviced residences secured, Citadines Sunhope e-Metro Shenzhen, Ascott’s largest property in China, is slated to open this year. Citadines Qingshan SCPG Centre Wuhan and Tujia Somerset Jundu Tianjin are scheduled to open next year while Ascott Xiangjiang FFC Changsha, Citadines Yunlong Lake Xuzhou and Tujia Somerset Congtai Handan will start operations from 2019. Last year, Ascott opened 14 properties in China, adding over 2,000 units to its portfolio.
With Ascott’s aggressive expansion, it has appointed Mr Kevin Goh as Chief Operating Officer to assist the CEO in overseeing operational aspects of the business and new growth opportunities, especially relating to its digital and online strategy. Prior to this, Mr Goh was Ascott’s Managing Director for North Asia since 2013, responsible for investments and operations in China, Japan and Korea. Before Mr Tan’s appointment as Managing Director for China, he was the Regional General Manager for Greater China and formerly Vice President for Business Development.