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CapitaLand Limited
Annual Report 2015
Ascott
The world’s largest international
serviced residence owner-operator
Ascott has a portfolio of quality serviced residences
which it manages and enhances through its operations and
award-winning brands across 95 cities in 27 countries.
Cementing Ascott’s Position as the World’s Largest
Serviced Residence Owner-Operator
The year ended with Ascott owning and managing about
43,000 units in 277 properties across 95 cities in Asia Pacific,
Europe, the Gulf region and the Americas, surpassing
its original target of 40,000 apartment units globally.
This cements its position as the world’s largest international
serviced residence owner and operator.
In 2015, Ascott added close to 6,700 units to its global
network, representing a 37% increase from the number
of units added in 2014. Ascott’s hospitality management
and service fee income grew by 14% year-on-year to reach
S$152 million in 2015 (2014: S$133 million). Overall, on a
same store basis, Revenue Per Available Unit grew 1% to
S$124 in 2015 (2014: $123).
In addition to deepening its presence in key cities in Asia
Pacific, Europe and the Gulf region, Ascott also successfully
made its maiden investment in the United States of America
through the acquisition of a prime property located in
Times Square in Midtown Manhattan, New York by Ascott
Residence Trust (Ascott Reit) for S$220.7 million.
As part of its capital recycling strategy, Ascott unlocked
value through the divestment of three serviced residence
properties in Australia and Japan and a portfolio of rental
housing properties in Japan worth a total of S$372.8 million
to Ascott Reit.
Forging Strategic Collaborations and Strengthening
Capabilities
As part of its global expansion plans, Ascott entered into a
joint venture with blue chip capital partner Qatar Investment
Authority, to set up a US$600 million global serviced
residence fund – Ascott’s largest private equity fund to date.
To date, the fund has already announced the acquisition of
two prime properties in the heart of Paris and Tokyo for
a total of US$137 million (S$191 million), demonstrating
Ascott’s strong capabilities in deal sourcing and execution.
To capitalise on the growing sharing economy, Ascott
led a consortium to invest over S$120 million in Tujia.com
International (Tujia), China’s largest online apartment sharing
platform. Ascott’s three internationally recognised brands of
serviced residences – Ascott, Citadines and Somerset –
have since been made available on Tujia’s online platform,
successfully expanding their reach to more guests in China
and beyond. As part of the collaboration, Ascott has formed
a majority joint venture for the offline business with Tujia.
This will help to further build scale and accelerate Ascott’s
footprint expansion in China.
In addition, Ascott par tnered Samsung Electronics
(Samsung) to jointly develop Internet of Things-ready smart
solutions customised for its serviced residences, making
it the first global serviced residence company to embrace
smart home technologies. Ascott has since worked with
Samsung to conduct initial studies and a joint innovation
workshop, and will test-bed new solutions at selected
serviced apartments by 1H 2016.
Implementing Proactive Asset Management
Ascott continued its Asset Enhancement Initiatives (AEI)
to reposition and upgrade its products to drive organic
operational growth. Since 2013, more than S$125 million
has been invested to refurbish various properties in
Asia and Europe. The results are positive as refurbished
properties have achieved a higher Average Daily Rate (ADR).
For instance, the ADR for refurbished apartment units at
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Looking Ahead
As a global serviced residence leader, Ascott will continue
to accelerate its growth through investments, management
contracts, strategic alliances and franchises, to achieve the
new target of 80,000 units globally by 2020. Ascott remains
on track to achieve a robust return on equity through
additional fee income contribution from the properties
that will be opening over the next few years as well as
through its joint venture and fund management platform.
Furthermore, Ascott remains focused on developing new
capabilities that would provide the competitive edge in
the medium- to long-term so as to grow from strength to
strength.
