Singapore group ploughs $180m into Quest Apartments
Singapore’s Ascott group has ploughed $180 million into Quest Apartment Hotels, increasing its stake from 20% to 80%, claiming it is now Australia’s largest serviced residence provider.
Ascott chief executive Lee Chee Koon says the acquisition immediately gives the company an extra 11,000-plus units, adding that scale is important to the group because it strengthens sales and distribution.
Ascott is a subsidiary of Singapore-listed group CapitaLand Ltd, one of Asia’s largest real estate companies with a global portfolio worth $S78 billion ($74bn) in shopping malls, offices and serviced residences.
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“Besides entrenching Ascott’s presence in the developed and stable market of Australia, we will be able 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,” Lee says.
Ascott first bought into Quest in 2014, acquiring a 20% stake. Quest’s network revenue is showing a healthy annual growth of 6% “resulting in strong annual profit earnings primarily from Quest’s recurring fee income”.
Ascott has also acquired its first serviced residence in Brisbane as part of a deal with Quest, paying $24 million for a 100-unit freehold serviced residence to be developed in Cannon Hill and operated by Quest as a franchise. Ascott also controls the 221-unit Quest NewQuay Docklands, which it acquired for $71 million last year.
Lee says Ascott will seek opportunities for new projects as well as acquiring existing accommodation.
Ascott now owns more than 10 serviced residences of more than 1300 apartment units in Brisbane, Sydney, Hobart, Melbourne and Perth under its Citadines, Somerset and Quest brands. Quest has 180 branded properties comprising more than 9000 units in Australia, New Zealand and Fiji. A further 2000 units are under construction.
Quest chairman Paul Constantinou says the group will now “fast-track” its international expansion.
This article originally appeared on www.theaustralian.com.au/property.
