Ascott Acquires First Serviced Residence in Docklands, Melbourne

Ascott is acquiring its first serviced residence in Docklands, Melbourne as part of its A$500 million (S$500 million) strategic partnership with Quest Apartment Hotels (Quest), one of the largest serviced apartment operators in Australia.

The 221-unit property will be acquired for A$71 million (S$71 million) through a 50:50 joint venture between Ascott and Qatar Investment Authority (QIA).

Quest will lease the serviced residence, which will be named Quest NewQuay Docklands, and operate it under Quest’s franchise when the property opens in 2019. Quest NewQuay Docklands will be Quest’s largest property in its network.

“Ascott is a global serviced residence leader that owns and manages over 46,000 units worldwide and we have a strong base of customer accounts that are multinational companies, while Quest is a leading operator in Australia with more than 80% of its customers from Australia’s top companies,” said Mr Lee Chee Koon, Ascott’s Chief Executive Officer. “Through our strategic partnership with Quest, we can combine our expertise to drive Ascott’s expansion in Australia and enjoy stable income as Quest will provide fixed leases for the properties and operate them under its well-established franchise. By taking a stake in Quest, Ascott also stands to benefit from the growth of the Quest franchise. Ascott focuses on prime city centre locations whereas Quest primarily targets suburban locations with underserved demand. Together, we can lead the expansion of the serviced residence sector which has significant untapped potential.”

Through the Ascott-Quest alliance formed in late-2014, Ascott will invest up to A$500 million in new properties that Quest will secure for its franchise in Australia until 2019. Ascott has a right of first refusal to acquire the properties sourced by Quest. Quest will provide a lease for the properties, which will be operated under franchises using the Quest brand.

In addition, Ascott acquired a 20% stake in Quest, with an option to increase it to 30%. At the same time, Ascott’s real estate investment trust, Ascott Residence Trust, also acquired three operating serviced residences in Greater Sydney from Quest. Quest Sydney Olympic Park,  Quest Campbelltown and Quest Mascot are being operated under franchises by Quest.

Quest NewQuay Docklands

The serviced residence is located within the business and lifestyle precinct of NewQuay in Docklands, an extension of Melbourne’s Central Business District which is a 10-minute drive away.

The ongoing development of Docklands is one of Australia’s largest  urban renewal projects and the area has already attracted more than A$10 billion of private investment.

Upon completion of the Docklands redevelopment in 2025, the State Government of Victoria expects Docklands would have received A$17.5 billion of private investment and be home to approximately 60,000 office workers, signifying potential demand for Quest NewQuay Docklands.

Quest NewQuay Docklands is expected to draw strong demand from corporate customers as it is located close to some of Australia’s largest companies and government institutions. These include ANZ Bank, National Australia Bank, Australian Customs Services, Medibank, Myer, Channel 9 and Channel 7.

The serviced residence is also located opposite the last lot within the NewQuay precinct where an office building is slated to be built.

Quest NewQuay Docklands is within walking distance to Etihad Stadium where major concerts, conferences and events are held; Harbour Town Shopping Centre; O’brien Group Arena which has one of Australia’s biggest ice skating rinks; as well as a range of waterfront dining outlets.

The serviced residence will offer studios, one and two-bedroom apartments as well as facilities such as conference rooms, a gymnasium and an outdoor terrace with barbeque pits.

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