Singapore’s Ascott to expand following US$600m joint venture
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Ascott, the serviced residence company owned by Singapore’s Capitaland, is planning to expand its global presence following the signing of a major new deal.
The company has entered into a 50-50 joint venture with Qatar Investment Authority (QIA) to set up a US$600 million serviced residence fund, with an initial focus on the Asia Pacific and Europe regions. This marks Ascott’s largest private equity fund to date and will invest in serviced residences or rental housing properties.
Ascott will have first right to manage the properties it acquires.
“Ascott is adopting a co-investment approach in this 50-50 strategic partnership with QIA, as a testament of our strong alignment of interest with our capital partners,” said Lee Chee Koon, Ascott’s CEO. “As Ascott steps up on investments to expand our presence globally, this serviced residence fund will provide the financial backing to support our acquisitions and accelerate Ascott’s growth to achieve our target of 80,000 apartment units globally by 2020.
“We will also be able to increase our fee-based income as Ascott has the first right to manage the properties that the fund acquires. We look forward to the many attractive opportunities ahead to put this capital to good work as we build a long-term partnership with QIA,” he added.
Ascott also currently manages a US$500m fund in China that invests in serviced residences across the country, and a JPY12.6 billion (US$103m) fund in Japan. And Capitaland is now aiming to launch six new funds with total assets of up to SG$10bn (US$7.4bn) by 2020.
“Real estate is a capital intensive business and fund management is central to the active capital management strategy of CapitaLand as a dominant real estate player,” said Lim Ming Yan, president & Group CEO of CapitaLand. “This tie-up with QIA is a good example of how we are proactively working with strong capital partners to build up scale.
“With Ascott’s newly set-up global serviced residence fund, CapitaLand now manages 17 real estate private equity funds and five real estate investment trusts (REITs) with AUM (assets under management) worth over SG$43bn.
“This Ascott global serviced residence fund brings us a step closer towards our goal of raising five to six funds with total AUM of SG$8-10bn by 2020,” he added.
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