CapitaLand Investment Limited’s (CLI) wholly owned lodging business unit, The Ascott Limited (Ascott) is acquiring a freehold asset in Tokyo, Japan via the Ascott Serviced Residence Global Fund (ASRGF), Ascott’s private equity fund with Qatar Investment Authority. The asset will be refurbished to introduce Ascott’s first lyf-branded coliving property in the city. The acquisition follows Ascott’s signing of over 7,500 units in 1H 2022, a 32% increase compared to the same period last year.
Ascott has also opened 20 properties with more than 4,500 units in 1H 2022, a 56% year-on-year (y-o-y) increase in units. In addition, Ascott has recently completed its acquisition of Oakwood Worldwide (Oakwood) in July 2022, expanding its portfolio by about 15,000 units to over 153,000 units across over 900 properties. The newly signed and opened properties as well as the addition of Oakwood will further boost Ascott’s recurring fee income.
The 140-unit coliving property to be named lyf Ginza Tokyo is ASRGF’s fourth acquisition in 2022, deploying close to S$400 million across four countries in under five months. Slated to open in June 2023, lyf Ginza Tokyo is set to meet the lodging demand of conglomerates and start-ups located nearby and cater to leisure travellers visiting the capital city. With the acquisition of lyf Ginza Tokyo, ASRGF will hold 12 properties with over 2,300 units across 91 countries.
Mr Kevin Goh, CLI’s Chief Executive Officer for Lodging, said: “Ascott has completed our acquisition of Oakwood, and achieved strong organic growth in 1H 2022 with the addition of newly signed and opened properties across our brands. This allows us to build upon our recurring fee income stream. We have kicked-off the integration of Oakwood with Ascott, placing us in a stronger position to drive further growth, deliver higher returns to our property owners and offer better experiences to our guests.”
“As a vertically-integrated global lodging business, Ascott is able to leverage our full suite of real estate investment and management capabilities for expansion. In addition to increasing our recurring fee income via new management and franchise contracts, we see opportunities to grow our funds under management through our private funds such as ASRGF and our Student Accommodation Development Venture. We will continue to step up our growth as demand for lodging increases with the resumption of international travel,” added Mr Goh.
Mr Mak Hoe Kit, Ascott’s Managing Director for Lodging Private Equity Funds and Head of Business Development, said: “Extended stay lodging assets such as serviced residences and coliving properties are becoming increasingly attractive as an investment class. Investors have recognised its resilience to withstand economic challenges and flexibility to reap the benefits during an upswing in demand. Partnering with Ascott allows investors to leverage our award-winning lodging operations to add more value to their investments. With the addition of lyf Ginza Tokyo, we are close to the full deployment of ASRGF. We seek to establish more lodging funds and attract like-minded capital partners to tap on Ascott’s established investment and operational expertise to grow. Through our strong local team’s expertise in deal origination, we continue to hunt for under-valued and/or under-performing assets which we will then further enhance their performance.”
Acquisition of lyf Ginza Tokyo expands ASRGF’s portfolio to 12 properties
In addition to lyf Ginza Tokyo, ASRGF’s acquisitions this year include lyf Bondi Junction Sydney in June 2022, as well as Somerset Hangzhou Bay Ningbo and Citadines Canal Amsterdam in March 2022. ASRGF had previously divested its first property at returns that outperformed its expected underwriting.
The fund has five operational properties – Ascott Sudirman Jakarta, La Clef Champs-Élysées Paris, Citadines Islington London, lyf Funan Singapore and Quest NewQuay Docklands Melbourne. Seven properties are under development. Besides lyf Ginza Tokyo that is scheduled to open in 2023, Somerset Metropolitan West Hanoi, Citadines Canal Amsterdam, Citadines Walker North Sydney, lyf Bondi Junction Sydney and lyf Gambetta Paris, Ascott’s first lyf-branded coliving property in Europe, are slated to open in 2024. Somerset Hangzhou Bay Ningbo is expected to open in 2025.
Boost to Ascott’s global presence and recurring fee income in 1H 2022
Aside from lyf Ginza Tokyo, 88% of the new units Ascott signed in 1H 2022 were on management or franchise contracts, while 12% of the units were investments through Ascott’s private funds or its hospitality trust Ascott Residence Trust.
Among the new units added in 1H 2022 are four rental housing properties under Ascott’s Adoor brand in China. This includes the 1,412-unit Adoor Apartment Shanghai (New Development), Ascott’s largest property in China, as it seeks to tap on the increasing demand from young and mobile professionals looking to rent fully-furnished homes on a longer-term basis in China. Ascott has also signed three Ascott-branded properties and five Somerset-branded properties in China. In addition, Ascott has secured 10 Citadines- and Citadines Connect-branded properties in Singapore, China, Malaysia, South Korea, Vietnam, Netherlands, Ethiopia, and Turkey; as well as four Quest-branded properties in Australia. The properties are slated to open between 2022 and 2026.
For more about lyf Ginza Tokyo and highlights of new properties signed and opened in 1H 2022, please see the Annex.
Expansion of Ascott Star Rewards to further strengthen customer engagement
Ascott’s loyalty programme, Ascott Star Rewards (ASR), continue to see high demand with its membership growing 40% y-o-y and member bookings more than tripled in 1H 2022 compared to 1H 2021.
Since its launch in 2019, ASR has grown to more than 2.3 million members and with the completion of the acquisition of Oakwood, membership is expected to increase. ASR members contribute about 90% of Ascott’s direct bookings online and about 50% of ASR members are repeat guests.
In March 2022, Ascott upgraded ASR to offer more rewards for members’ bookings made via its direct channels as well as expanded the programme to include more exclusive benefits. ASR members can enjoy priority check-ins, birthday discount e-vouchers and look forward to brand-specific arrival experiences and welcome amenities or signature gifts that are customised across Ascott’s suite of award-winning brands. As the Oakwood properties join the ASR network, members can access more quality lodging options to earn points.
