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SINGAPORE (July 12): CapitaLand's wholly-owned serviced residence business unit, The Ascott, is acquiring a 221-unit serviced residence in Docklands, Melbourne, for A$71 million (S$71 million) (RM210 million) as part of its partnership with Australian-based apartment operator Quest Apartment Hotels.
The acquisition is a first under Ascott's partnership with Quest.
It is also a 50:50 joint venture between Ascott and Qatar Investment Authority (QIA), marking Ascott’s fourth joint acquisition with QIA within seven months.
Quest will lease the serviced residence, which will be the largest property in its network, and operate it under its franchise when the property opens in 2019 as Quest NewQuay Docklands.
The Ascott-Quest alliance was formed in late 2014 under the agreement that Ascott will invest up to A$500 million in new properties which Quest will secure for its franchise in Australia until 2019.
Ascott has a 20% stake in Quest with an option to increase it to 30%. The company’s real estate investment trust, Ascott Residence Trust, owns three operating serviced residence in Greater Sydney acquired from Quest.
“Through our strategic partnership with Quest, we can combine our expertise to drive Ascott’s expansion in Australia and enjoy stable income as Quest will provide fixed leases for the properties and operate them under its well-established franchise,” says Ascott CEO Lee Chee Koon in a statement on Tuesday.
“By taking a stake in Quest, Ascott also stands to benefit from the growth of the Quest franchise.”
CapitaLand closed 1.34% higher at S$3.03 on Monday. — theedgemarkets.com
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