The Ascott snaps up serviced apartment competitor
Imagery courtesy of Oakwood Worldwide.
CapitaLand Investment Limited (CLI) lodging business, The Ascott Limited, is acquiring serviced apartment provider Oakwood Worldwide from Mapletree Investments.
The deal is intended to fast-track Ascott’s growth to over 150,000 units globally, with about 900 properties across over 200 cities in 39 countries.
In total, the acquisition increases Ascott’s global portfolio by 81 properties and about 15,000 units. Oakwood’s approximately 8,500 operational units are expected to immediately contribute to Ascott’s recurring fee income streams upon completion of the transaction expected in the third quarter of 2022.
New markets entry
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 USA. 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 add to the group’s destination highlights.
According to the TOPHOTELPROJECTS database, the Oakwood brand is planning to add at least a further 12 sites globally, including Oakwood Hotel & Apartments Meridian in Idaho, USA; Oakwood Suites Leicester in the UK and Oakwood Premier Kuala Lumpur in Malaysia.
Ascott’s strategic investments in recent years include its acquisition in 2017 of Quest Apartment Hotels, one of the largest serviced apartment operators in Australasia, to grow its business franchise arm. In the same year, Ascott invested in Synergy Global Housing, a leading corporate housing provider in the USA.
In 2018, Ascott acquired Tauzia Hotel Management, one of the top hotel operators in Indonesia, to enter the fast-growing mid-scale business hotel segment. With Oakwood coming onboard, Ascott believes it will achieve its target of 160,000 units globally well ahead of 2023.
Kevin Goh, CLI’s CEO for lodging, said: “This acquisition of Oakwood is part of Ascott’s roadmap to playing a bigger role in the lodging market. There are significant synergies between Ascott and Oakwood, given our complementary footprint and product offerings. We intend to build on the strong reputation and heritage of the Oakwood brand, especially in markets across Southeast Asia, North Asia and North America. Oakwood will continue to grow alongside Ascott’s current portfolio of global brands as we continue to build growth momentum for our lodging business. We will be able to leverage Ascott’s extensive expertise as a global lodging player to deliver greater value to our expanded network of loyal customers and property owners.
“Besides strategic alignment, this acquisition is also notable to Ascott commercially. Ascott’s acquisition of Oakwood brings about an immediate boost to our units under management and franchise contracts. The Oakwood portfolio will accelerate the growth of our asset-light business, with added recurring fee income streams, expanded lodging offerings and increased customer base. The strategic moves we have made in the last few years, such as our investments in Quest, Synergy and Tauzia, have charted an unprecedented growth path for Ascott.”
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