Ascott has confirmed that it is acquiring an
additional 60% stake in Quest Apartment Hotels (Quest) for A$180
million (S$191 million).
The acquisition will increase Ascott’s stake in
Quest from its current 20% to 80%, propelling Ascott to become the
largest serviced residence provider in Australasia.
With 180 properties located in regional
and metropolitan areas across Australia, New Zealand and Fiji, the
acquisition will boost Ascott’s portfolio by over 11,000 units to
more than 67,000 units across 507 properties and 124 cities
Ascott also has the option to acquire the
remaining 20% interest in Quest, subject to terms and conditions.
“Increasing our stake in Quest to become its majority shareholder
will leapfrog Ascott to become the leading serviced residence
provider in Australasia. This acquisition will give Ascott an
instant boost of over 11,000 units. Scale is important for us to
offer more options to customers, strengthen our sales and
distribution, and help speed up Ascott’s growth. 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,” said
Mr Lee Chee Koon, Ascott’s Chief Executive Officer. “Since Ascott’s acquisition of
a 20% stake in Quest in 2014, Quest’s network revenue has seen a
healthy annual growth of 6%, 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.”
has also acquired its first serviced residence in Brisbane as part of
its strategic partnership with Quest.
The 100-unit freehold
serviced residence to be developed on a turnkey basis has been acquired
from an unrelated local property developer for A$24 million (S$25
million). It will be named Quest Cannon Hill and operated as a
Quest franchise when the property opens in 2018.
Hill is the second acquisition under Ascott’s strategic
partnership with Quest. In mid-2016, Ascott acquired the 221-unit
Quest NewQuay Docklands in Melbourne for A$71 million (S$71
million). Quest NewQuay Docklands will be Quest’s largest property
in its network when it opens in 2019.
Mr Lee said, “We first
took a 20% stake in Quest a few years back; it gave us time to
work together and understand each other's culture and strengths.
After due consideration, we decided to take the partnership
further with this move. We firmly believe that the synergies of
Ascott and Quest will make us more competitive in the serviced
residence space. Quest also has a strong talent bench that could
contribute to Ascott’s global expansion plan.”
With the addition of Quest Cannon Hill, Ascott currently owns and
manages 10 serviced residences with over 1,300 apartment units in
Brisbane, Greater Sydney, Hobart, Melbourne and Perth under the
Citadines, Somerset and Quest brands. Quest has 180 properties
with over 9,000 existing units in Australia, New Zealand and Fiji,
and over 2,000 units under construction.
Ascott has a target of exceeding 80,000 units
globally by 2020.
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