The Ascott seizes serviced apartment competitor

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Images courtesy of Oakwood Worldwide.

CapitaLand Investment Limited’s (CLI) accommodation business, The Ascott Limited, is acquiring serviced apartment provider Oakwood Worldwide from Mapletree Investments.

The deal aims to accelerate Ascott’s growth to more than 150,000 units worldwide, with approximately 900 properties in more than 200 cities in 39 countries.

In total, the acquisition increases Ascott’s global portfolio by 81 properties and approximately 15,000 units. Oakwood’s approximately 8,500 operating units are expected to immediately contribute to Ascott’s recurring revenue streams upon completion of the transaction expected in the third quarter of 2022.

Entry into new markets

New markets for Ascott will now include Cheongju in South Korea; Zhangjiakou and Qingdao in China; Dhaka in Bangladesh as well as Washington DC in the United States. Oakwood’s portfolio includes flagship properties, Oakwood Premier Tokyo and Oakwood Premier Coex Center Seoul, while new properties such as Oakwood Premier Melbourne and Oakwood Hotel Oike Kyoto will also join the group’s flagship destinations.

According to the TOPHOTELPROJECTS database, the Oakwood brand plans to add at least 12 more locations worldwide, including Oakwood Hotel & Apartments Meridian in Idaho, USA; Oakwood Suites Leicester in the UK and Oakwood Premier Kuala Lumpur in Malaysia.

Multiple purchases

Ascott’s strategic investments in recent years include the 2017 acquisition of Quest Apartment Hotels, one of Australasia’s largest serviced apartment operators, to expand its business franchise arm. In the same year, Ascott invested in Synergy Global Housing, one of the leading corporate housing providers in the United States.

In 2018, Ascott acquired Tauzia Hotel Management, one of the leading hotel operators in Indonesia, to enter the growing segment of mid-sized business hotels. With the arrival of Oakwood, Ascott expects to reach its goal of 160,000 units worldwide well before 2023.

Accommodation roadmap

Kevin Goh, CEO of CLI for Accommodations, said, “This acquisition of Oakwood is part of Ascott’s roadmap to play a bigger role in the accommodations market. There are significant synergies between Ascott and Oakwood, given our complementary footprint and product offerings. We intend to build on the solid reputation and heritage of the Oakwood brand, particularly in the Southeast Asian, North Asian and North American markets. Oakwood will continue to grow alongside Ascott’s current portfolio of global brands, while continuing to create growth momentum for our lodging business. We will be able to leverage Ascott’s vast expertise as a global accommodations player to deliver greater value to our expanded network of loyal customers and owners.

“In addition to the strategic alignment, this acquisition is also commercially significant for Ascott. Ascott’s acquisition of Oakwood provides an immediate boost to our units under management and franchise contracts. Oakwood’s portfolio will accelerate the growth of our asset-light business, with additional recurring fee revenue streams, expanded hosting offerings and an increased customer base The strategic decisions we have made in recent years, such as our investments in Quest, Synergy and Tauzia, have charted an unprecedented growth path for Ascott.”

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