Ascott advances into South America with its first two franchise properties in Brazil the region’s largest economy
Targets 10,000 serviced residence units in South America in the next five years; sets its sights to expand in Brazil, Argentina, Chile and Mexico
Singapore, 4 April 2017 – CapitaLand’s wholly owned serviced residence business unit, The Ascott Limited (Ascott) steps up its global expansion as it breaks into South America with franchise agreements for two serviced residences in São Paulo, Brazil. Vitacon, a leading real estate company in São Paulo, will franchise and operate the 92-unit Citadines VN Jardins São Paulo and 122-unit Citadines VN Faria Lima São 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 Citadinesbranded units in São Paulo.
Mr Lee Chee Koon, Ascott’s Chief Executive Officer, said: “Ascott’s entry into South America through franchise is a significant move to expand our global network of properties, and in turn increase our fee income. 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 investments1 . Brazil’s FDI hit a record high in December last year, reaching US$15.4 billion2 . 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.”
“Citadines is Ascott’s fastest growing brand having more than tripled its portfolio since our acquisition of the Citadines Apart’hotel chain in Europe in 2004. We have since brought the brand to Asia Pacific, Middle East and now South America. Through franchise, Ascott can leverage the partners’ local know-how and widen our global network to even more geographies.”
Mr Lee added: “Our strategic partnership with Vitacon provides further impetus for Ascott to expand, given their sizable landbank in prime locations across São Paulo, home to many of Brazil’s largest multinational corporations and the region’s financial hub. There is also a lack of quality accommodation to cater to the needs of expatriates and business travellers. Franchise, investments, management contracts and strategic alliances will continue to be key strategies to boost Ascott’s lead as we march towards our target of 80,000 units globally by 2020.”
Mr Alexandre Lafer Frankel, co-founder and CEO of Vitacon, said: “We are delighted to partner Ascott to bring Citadines into São Paulo by tapping on Ascott’s extensive global sales and distribution network, strong brand recognition and loyalty, and management expertise. Vitacon sees opportunities in partnering Ascott to develop an international-class serviced residence network across Brazil. Like Ascott, Vitacon adopts an innovative approach to real estate development and management, delivering upscale, space-efficient solutions to meet the needs of urban dwellers and business travellers in São Paulo. In addition to the facilities and services available at other Citadines properties around the world, the two new serviced residences in São Paulo will feature coworking spaces, shared amenities such as bikes, cars, and motorcycles, as well as common spaces like cafés, gymnasiums and storage spaces.”
Headquartered in Brazil, Vitacon has launched 40 residential and commercial projects delivering an estimated US$1 billion in sales, of which 25 projects have been completed. Vitacon also manages about 1,200 furnished apartment units for lease in São Paulo, providing concierge, laundry and housekeeping services.
Designed for independent travellers who want the flexibility of choosing services they require, Ascott’s Citadines network will increase to over 18,500 units in 71 cities, with the addition of the two new serviced residences.
1 ‘World Investment Report 2016’, United Nations Conference on Trade And Development, 21 June 2016 2 ‘Business bets on Brazil economic rally’, Financial Times, 6 February 2017