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To be developed on a turnkey basis, the 100-unit freehold serviced residence will be operated as a Quest franchise when it opens in 2018. (Image: The Ascott Limited)
The Ascott Limited, CapitaLand’s wholly owned serviced residence business, acquired an additional 60 percent stake in Quest Apartment Hotels for A$180 million (S$191 million).
The acquisition will increase its stake in Quest from the current 20 percent to 80 percent, making Ascott the biggest serviced residence provider in Australasia. It will also boost Ascott’s portfolio by more than 11,000 units to over 67,000 units across 507 properties and 124 cities globally.
In an SGX filing, Ascott revealed that it also has “the option to acquire the remaining 20 percent interest in Quest, subject to terms and conditions”.
“Since Ascott’s acquisition of a 20 percent stake in Quest in 2014, Quest’s network revenue has seen a healthy annual growth of six percent, resulting in strong annual profit earnings primarily from Quest’s recurring fee income. Ascott will enjoy the recurring franchise fees that Quest earns from its franchise properties and enhance the stability of our portfolio income as well as return on equity,” said Ascott chief executive officer Lee Chee Koon.
As part of its partnership with Quest, Ascott acquired its first serviced residence in Brisbane from an unrelated local property developer for A$24 million (S$25 million).
To be developed on a turnkey basis, the 100-unit freehold serviced residence – to be named Quest Cannon Hill – will be operated as a Quest franchise when it opens in 2018.
Quest Cannon Hill is Ascott’s second acquisition under its strategic partnership with Quest. In 2016, it acquired the Quest NewQuay Docklands for A$71 million (S$71 million). Located in Melbourne, the 221-unit Quest NewQuay Docklands will be the largest property within Quest’s network when it opens in 2019.
The addition of Quest Cannon Hill brings Ascott’s portfolio to over 1,300 units across 10 serviced residences in Greater Sydney, Brisbane, Melbourne, Hobart and Perth under the Somerset, Citadines and Quest brands.
Quest, on the other hand, has 9,000 existing units across 180 properties in New Zealand, Australia and Fiji as well as more than 2,000 units under construction.
This article was edited by Denise Djong.
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