Ascott and Qatar Investment Authority target Docklands
Ascott Limited, the world’s biggest serviced apartment operator and a subsidiary of Singapore-listed real estate giant CapitaLand has teamed up with the $337 billion Qatar Investment Authority to acquire a new $71 million Quest apartment hotel.
The deal will see them jointly acquiring the new 221-room Quest NewQuay Docklands apartment hotel.
That hotel is being built by private developer MAB Corporation at its New Quay waterfront precinct. It will be built at Melbourne’s Docklands. Construction starts early next year with plans to have it opening in 2019.
It follows on from Ascott Limited striking a $500 million agreement with Quest two years ago to start investing in new hotel developments. As part of that deal, Ascott Limited picked up 20 per cent of Quest for $28.8 million. Meanwhile, its listed real estate investment trust, the Ascott Residence Trust acquired three Quest apartment hotels in Western Sydney for $83 million.
Docklands represents Ascott’s first Australian acquisition. It’s the fourth acquisition globally shared by Ascott and QIA.
All this is part of the $US600 million ($790 million) joint serviced-apartment fund the two partners had established last year.
To get an idea of the scope of Ascott, it is important to keep in mind that it operates 18,000 serviced apartments globally under its Ascott, Citadines and Somerset brands, including hotels in Melbourne, Hobart and Perth. And last year, Ascott REIT picked up the 380-room Citadines on Bourke Melbourne Hotel from its parent Ascott Limited for $158.5 million. Ascott also owns the Citadines St Georges Terrace in Perth.
"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,' Ascott chief executive Lee Chee Koon told the Australian Financial Review.
Quest founder and chairman Paul Constantinou told the AFR that the Docklands deal would enable Quest to accelerate its rollout of new hotels across Sydney, Brisbane and Melbourne.
As he put it, it was very much the blueprint for how the partnership would work.
by Leon Gettler, July 13th 2016
