In July 2015, we wrote that CapitaLand Limited’s wholly owned serviced residence business unit, The Ascott Limited, has entered into a 50:50 joint venture with Qatar Investment Authority (QIA) to set up a US$600 million serviced residence fund with an initial focus on the Asia Pacific and Europe regions. Today, we received that the partners have acquired two prime properties in Paris and Tokyo for USD104 million (S$145 million).
The fund will invest another USD33 million (S$46 million) to convert the office building in Paris into a luxury serviced residence and embark on asset enhancement to reposition the serviced residence in Tokyo, bringing the total investment to USD137 million (S$191 million).
The 70-unit Citadines Suites Champs-Élysées Paris is slated to open in 2018 while the serviced residence that has been operating as Somerset Shinagawa Tokyo since acquisition will undergo asset enhancement to reposition the property with additional apartments to be reconfigured. This is expected to be completed by end 2016. With these acquisitions, Ascott now has more than 43,000 units across 277 properties, spanning 95 cities; cementing Ascott’s position as the world’s largest international serviced residence owner and operator.
Mr Lee Chee Koon, Ascott’s Chief Executive Officer, said, “Previously the private residence of the renowned Hennessy family, Citadines Suites Champs-Élysées Paris is a rare gem in the epicentre of the world’s most popular tourist destination. Paris is not only a must-see for tourists; it is also Europe’s second most attractive city for foreign investments. Demand for accommodation is growing faster than supply as tourist arrivals in Greater Paris rose by 11.7% to 22.4 million between 2003 and 2014 while room supply increased by only 5.3%. Deepening Ascott’s presence in Paris will enable us to better cater to the strong demand and build economies of scale in our operations.”
“Japan is an equally attractive destination for corporate and leisure travellers given the weak Japanese yen, eased visa requirements and proliferation of low-cost carriers, coupled with the implementation of pro-business policies and designation of special economic zones. In the past two years, Japan saw record-breaking visitor arrivals, an uptrend that is set to continue. Somerset Shinagawa Tokyo, which is located close to the city’s major transportation hub, is well-poised to meet the growing long-stay accommodation demand.”
Citadines Suites Champs-Élysées Paris
The five-storey Haussmannian-style building along Rue de Bassano was formerly the private residence of the renowned cognac distillers, the Hennessy family. In the prestigious eighth district of Paris, Citadines Suites Champs-Élysées is an exclusive address in close proximity to high-end fashion houses, surrounded by leisure attractions such as the Arc de Triomphe, Grand and Petit Palais, embassies and international companies. The luxury serviced residence will also house a restaurant and lounge as well as a fitness centre. Citadines Suites Champs-Élysées Paris is the third luxury Citadines Suites serviced residence by Ascott, increasing Ascott’s portfolio to more than 3,000 units in 28 properties across 10 cities in France.
Somerset Shinagawa Tokyo
Somerset Shinagawa Tokyo is currently a 50-unit serviced residence operating in the high-end residential district of Takanawa, an area popular with senior management executives from multinational companies. The serviced residence is a five-minute walk from Shinagawa Station, a major transportation hub connecting the Shinkansen and six railway lines, less than 20 minutes away from Tokyo International Airport (Haneda Airport) and has easy access to key stations in Tokyo city. Shinagawa Station is also the Tokyo terminal station for Japan’s Maglev train which will begin operation from 2027. The area has undergone redevelopment in recent years and is now an international business hub, home to corporations such as Sony and Microsoft. This latest acquisition brings Ascott’s portfolio to more than 3,400 units in six serviced residences and 39 rental housing properties across eight cities in Japan.