Singapore-based The Ascott Limited has taken a majority stake in Quest Apartment Hotels with an A$180 million (US$137.2 million) investment in the apartment hotel operator.
With the investment, which gives Ascott an 80% stake in Quest and an option to acquire the remaining 20%, Ascott becomes the largest serviced-residence provider in Australasia. Quest has 180 properties in Australia, New Zealand and Fiji.
The acquisition increases Ascott’s portfolio to more than 67,000 units across 507 properties and 124 cities. Its goal is to reach 80,000 units globally by 2020.
The Ascott Limited is a wholly owned serviced residence business of CapitaLand.
“Scale is important for us to offer more options to customers, strengthen our sales and distribution, and help speed up Ascott’s growth,” said Lee Chee Koon, Ascott’s CEO. “Besides entrenching Ascott’s presence in the developed and stable market of Australia, we will be able to capitalize 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.” Since Ascott acquired a 20% stake in Quest in 2014, Quest’s network revenue grew 6% annually, primarily from recurring fee income, Lee said.
“The company now has the capability to offer customers a true global accommodation solution for both transient and extended stay requirements, and will allow Quest to fast track the growth of the brand as a unique franchising platform into global markets,” said Paul Constantinou, Quest chairman.
Ascott also acquired its first serviced residence in Brisbane as part of its partnership with Quest, which will open in 2018.