Ascott on track to achieve global target of 160,000 units by 2023: CEO
Apart from investing through its own capital and joint ventures, a key growth strategy is through Reits
Lee U-Wen
Singapore
THE Ascott - the lodging business unit of CapitaLand - aims to open about 10,000 units in 2020, with the company "on track" to achieve its global target of 160,000 units by 2023, said Ascott chief executive officer Kevin Goh on Wednesday.
In 2019, Ascott achieved a record opening of about 7,500 units in more than 40 properties across 30 cities and 13 countries.
It also signed 25 new franchise and management contracts with over 3,400 units across Asia-Pacific and Africa, to close the year with the signing of over 14,100 units across about 100 properties.
This includes its acquisitions of two properties in Sydney, Australia, this year through its real estate investment trust (Reit) Ascott Residence Trust, and its private fund Ascott Global Serviced Residence Fund.
The new properties this year marked Ascott's debut in several new cities including Vung Tau in Vietnam and Abidjan in Ivory Coast.
Also, among the 25 properties are two Citadines properties secured under Ascott's strategic alliance with Nasdaq-listed Huazhu Hotels Group and Huazhu's subsidiary CJIA Apartments Group.
Ascott opened four properties in Singapore in 2019 - Citadines Rochor Singapore which opened on Dec 12, Citadines Balestier Singapore, lyf Funan Singapore, and Ji Hotel Singapore. The latter is Huazhu's first hotel outside of China.
In total, Mr Goh said Ascott has now reached about 115,000 units in over 700 properties around the world. More than 60 per cent of its portfolio, which is operational, has contributed S$182.1 million of fee income.
"(We) will continue to grow recurring income via management contracts, franchises, leases and strategic alliances as well as invest in quality assets," he said in a news release.
He shared that besides investing through its own capital and joint ventures, one of Ascott's key growth strategies is to expand through its Reits and funds.
The combination of Ascott Residence Trust and Ascendas Hospitality Trust makes it "the largest hospitality trust in Asia-Pacific" with an asset value of S$7.6 billion, said Mr Goh.
He added that the new stapled securities under the enlarged trust - Ascott Residence Trust - are expected to begin trading on Jan 2 next year.
"This will allow us to further scale up our fund management platform. As a sponsor of the enlarged trust, Ascott will benefit from the trust's stable yield and growth as well as earn fund management fees," he said.
"On the other hand, the enlarged trust will benefit from Ascott's sponsorship and pipeline of quality assets, as we continue with our proactive capital recycling and investment strategies."
