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The Ascott Limited, CapitaLand's wholly owned serviced residence business unit, has set its sights to expand in South America with franchise agreements for its first two serviced residences in Sao Paulo, Brazil.
Sao Paulo real estate company Vitacon will franchise and operate the 92-unit Citadines VN Jardins Sao Paulo and 122-unit Citadines VN Faria Lima Sao Paulo. The two serviced residences are scheduled to open in the last quarter of this year and 2020 respectively.
Ascott and Vitacon have also signed an agreement with an intent to establish a portfolio of at least 5,000 Citadines branded units in Sao Paulo.
Lee Chee Koon, Ascott's chief executive officer, said: "We see strong potential to scale up Ascott's presence in Brazil given its status as the powerhouse of South America, accounting for close to half of the region's foreign direct investments. This signifies great opportunities for serviced residences as the region continues to attract corporations and business travellers.
"Anchoring ourselves in Brazil's largest city, we will seek to expand our footprint to other major cities including the capital of Brasília, Rio de Janeiro and Belo Horizonte. We will also explore opportunities in new markets such as Argentina, Chile and Mexico. In the next five years, Ascott aims to achieve 10,000 units in South America."