The Ascott Limited, the wholly owned serviced residence business of CapitaLand,Êis acquiring an additional 60 per centÊstake in Quest Apartment Hotels for A$180 million (S$191 million).
The acquisition increases AscottÕs stake in Quest from the current 20 per cent to 80 per cent, propelling Ascott to become the largest serviced residence provider in Australasia.
With 180 properties located in regional and metropolitan areas across Australia, New Zealand and Fiji, the acquisition will boost AscottÕs portfolio by over 11,000 units to more than 67,000 units across 507 properties and 124 cities globally.
At the same time, Ascott has the option to acquire the remaining 20 per centÊinterest in Quest, subject to terms and conditions.
ÒIncreasing our stake in Quest to become its majority shareholder will leapfrog Ascott to become the leading serviced residence provider in Australasia,” said Lee Chee Koon, AscottÕs Chief Executive Officer.Ê”This acquisition will give Ascott an instant boost of over 11,000 units.”
Besides entrenching AscottÕs presence in the developed and stable market of Australia, the acquisition will allow the company to capitalise on the established Quest brand and its highly scalable business format franchise systems and know-how, and further apply the franchise platform as a driver of growth for Ascott,ÊMr Chee KoonÊadded.
ÒSince AscottÕs acquisition of a 20 per centÊstake in Quest in 2014, QuestÕs network revenue has seen a healthy annual growth of 6 per cent, resulting in strong annual profit earnings primarily from QuestÕs recurring fee income,Ó said Paul Constantinou, Chairman of Quest Apartment Hotels.
Mr Constantinou said Quest will now further leverage the strength of AscottÕs globally recognised, award-winning brands and fast track its international expansion, whilst maintaining its successful franchise format business, along with the value and integrity of the Quest brand,.
In addition, Ascott has acquired its first serviced residence in Brisbane as part of its strategic partnership with Quest.
The 100-unit freehold serviced residence to be developed on a turnkey basis is acquired from an unrelated local property developer for A$24 million (S$25 million).
It will be named Quest Cannon Hill and operated as a Quest franchise when the property opens in 2018. Quest Cannon Hill is the second acquisition under AscottÕs strategic partnership with Quest.
With the addition of Quest Cannon Hill, Ascott currently owns and managesÊten serviced residences with over 1,300 apartment units in Brisbane, Greater Sydney, Hobart, Melbourne and Perth under the Citadines, Somerset and Quest brands.
Quest has 180 properties with over 9,000 existing units in Australia, New Zealand and Fiji, and over 2,000 units under construction.
