“ART’s strong performance
this first year clearly
demonstrates investors’
interest in this new asset
class. Going forward, ART
will continue to acquire
more serviced residence
assets from Ascott
and third-party owners.
We expect our target
portfolio value to be about
S$2 billion by end-2008.”
Mr Chong Kee Hiong
CEO, Ascott Residence Trust
Management Limited
Besides bolstering its presence
in existing markets including China,
the Philippines, Singapore, Thailand
and Vietnam, Ascott also made
inroads into new cities with high
potential demand for international class
serviced residences. These
include Hong Kong, Xi’an in Northern
China, Bangalore and Chennai in
India, Doha in Qatar, and Manama
City in Bahrain.
To build a strong, long-term
presence in key new-growth markets,
Ascott signed a master development
agreement (MDA) with Addax
Investment Bank in April to launch
at least 15 serviced residences
across the Middle East and North
Africa, to be managed by Ascott.
Two properties in Bahrain and Qatar
have been secured under this
arrangement. Another MDA was
signed with India’s The Rattha Group
in August to acquire and develop
seven properties in four southern
Indian states by 2010 at a
joint estimated investment of
US$220 million. As at end-2006,
two properties in Chennai and one
in Bangalore have been secured.
Growth Strategy
During the year, Ascott maintained
its focus on an ‘asset light, asset right’
strategy. Ascott re-allocated capital
through the divestments of mature
assets and re-invested the funds
into higher-yield assets. The group’s
investments and properties were
divested at a total value of more
than S$1 billion. The divestments
yielded cash proceeds of more than
S$650 million; this was substantially
re-invested to add over 2,400 serviced
residence units to the group’s portfolio.
On brand management, Ascott
completed an exercise to sharpen the
differentiation among its three brands –
Ascott, Somerset and Citadines. In
particular, the European Citadines
brand was refined and adapted for
launch in Asia as part of its pan-Asian
marketing and branding campaign
to bring Citadines to the region.
Looking Ahead
Moving forward, Ascott is poised
to achieve its global target of 25,000
serviced residence units.
At least 13
new properties across Bahrain, China,
Qatar, Singapore, Thailand and Vietnam
are slated to open in 2007. Ascott will
continue to fortify its presence in Asia
Pacific and Europe,
build a strong
foothold in key high-growth markets
in the GCC region, as well as seek new
emerging markets to enlarge its global
footprint. In February 2007, Ascott
announced its entry into the emerging
market of Russia with Amtel Properties
Development. Both partners will jointly
set up an initial fund of US$100 million
and build on this fund to secure 1,000
serviced residence units in Russia. |
