Singapore / DPA
Developer CapitaLand’s serviced
residence business unit, The Ascott, aims to fast-track its expansion into China by forging a strategic alliance with a major mainland player, Dongfu Investment
The Ascott is already the largest international serviced residence owner-operator in China, with more than 14,000 units in 24 cities.
The partnership, gives Ascott first right to manage both Dongfu apartments under development and its future projects, it said in a stock exchange filing. Dongfu is a real-estate subsidiary of China State Construction Engineering Company, China’s largest state-owned construction and infrastructure builder.
Ascott’s partnership with Dongfu follows its recent alliances with fast-growing companies such as Alibaba’s online travel site Alitrip and Tujia.com International, China’s largest online apartment sharing platform, as well as developers such as Vanke and Yuexiu.
“These partnerships will allow Ascott to deepen our presence and build scale in key cities; expand our network to new gateway cities; broaden our reach to even more travellers as well as create new seamless O2O (Offline-to-Online and Online-to-Offline) experiences for our guests,” said Ascott chief executive Lee Chee Koon in the statement.
Ascott and Dongfu kicked off this alliance with a management contract for the 148-unit Citadines Guoxitai Xi’an, which is slated to open in 2018 in Xi’an, the most populous city in north-west China.
The project is close to Xi’an’s Hi-Tech Industries Development Zone where 1,000 multinational corporations are based, and it is a 10-minute drive to the city centre.
The firm said the project has “further reinforced Ascott’s leadership position” in the segment. China is Ascott’s largest market with the most properties.
“We are positive that demand for quality serviced residences will continue to grow in China, riding on the increasing domestic travel especially in the first and second tier cities,” noted Kevin Goh, managing director for North Asia at Ascott.
Ascott said it will be looking at expanding in cities such as Shanghai and Jinan, tapping Dongfu’s major commercial building projects across these cities.
Goh added: “Our latest partnership with Dongfu Investment will widen Ascott’s lead as we advance towards our target of 20,000 units in China by 2020.”
Ascott said at least 10 properties are slated to open this year in cities including Beijing and Chongqing.