Interview with Mr Kevin Goh, Chief Executive Officer - The Ascott Limited. The Opening of the Residence La Clef Champs-Elysées Paris was the occasion to make an assessment of the brand's strategy and goals for the years to come.
What strategies do you have towards fund management?
The Ascott Limited (Ascott) has deep presence in many key gateway cities, across various lodging segments, from serviced residences, hotels, coliving apartments to leasing apartments. This provides a ready pipeline of assets for capital deployment. We have an established owner-operator track record of creating value through sound fund management strategies and delivering robust and attractive risk-adjusted returns for our investors.
Our latest acquisition in North Sydney, Australia is in line with our strategy of growing our fund management portfolio through private equity funds, joint ventures and listed hospitality trusts – all of which provide a core asset base for our fund management business. We believe in achieving scale in the business, and fund management is central to the active capital management strategy of Ascott as a dominant lodging real estate player.
Together with our capacity to co-invest with like-minded capital partners, it gives us the ability to stay invested in quality assets for the long term.
What are your development targets in Europe and worldwide? Which markets are the most profitable for the company?
We are on track to achieve our global target of 160,000 units by 2023 and Europe remains a key market as part of our expansion. With our 14 newly secured properties across Australia, China, France, Indonesia, Kenya and Vietnam, Ascott has achieved S$10 billion in asset value and reached a total of more than 112,000 units in over 700 properties worldwide. We will continue to expand through two engines of growth – to acquire quality assets as well as drive higher return on equity by growing our recurring income through management contracts, franchises, leases and strategic alliances.
Our customers from Asia are the top contributors with the highest percentage of occupancy, followed by customers from Europe.
Updates on Europe market
Our target is to reach 10,000 units in Europe by 2023. We currently have over 6,300 units in over 50 properties in Europe. Among the 14 new properties are four franchise agreements signed with Aegide Domitys, France’s leading provider of serviced accommodation for independent seniors. These four properties in France mark Ascott’s foray into three new cities – Golfe-Juan, Tours and Roanne, and will open from 2020 to 2023.
Citadines Connect City Centre Roanne is the first property in Europe under Ascott’s Citadines Connect brand of business hotels. Two properties, Hôtel Château Belmont Tours and La Clef Golfe-Juan, will be part of Ascott’s The Crest Collection and the fourth property is Citadines Toulouse. To date, we have six properties under our partnership with Aegide Domitys, whom we have also signed franchise agreements for Citadines Confluent Nantes and Citadines Eurometropole Strasbourg in 2017. This year alone, we have opened three properties in Europe, namely La Clef Champs-Élysées Paris, Citadines Sloterdijk Station Amsterdam, and Citadines Confluent Nantes. Meanwhile, we are also gearing up for the opening of Citadines Islington London this November and Citadines Wembley London in 2022 and Ascott Riverpark Tower Frankfurt in 2023.
How does your lyf brand for millennials grow?
Our lyf properties are specially designed to cater to millennials’ desire for community bonding, collaboration and cocreation.
We have recently opened our flagship coliving property under our ‘lyf’ brand in Singapore. Named lyf Funan Singapore, it is the largest coliving property in Southeast Asia. Located in the heart of Singapore’s Civic & Cultural District, lyf Funan Singapore is at the epicentre of the city-state’s buzzing retail, commercial, social and cultural belt. It is part of CapitaLand’s Funan integrated development with offices and a shopping mall with cutting edge retail concepts. Residents can therefore look forward to a dynamic work-live-play environment given the property’s easy access to a variety of retail and recreational options at its doorstep, weekly social programmes and activities and its collaborative spaces.
The booming millennial segment, which is the fastest growing travel demographic, already forms a quarter of Ascott’s customer base and is expected to grow. Besides lyf Funan Singapore, we have seven more lyf properties to be opened over the next three years. We will open lyf in Bangkok, Fukuoka, Kuala Lumpur, Singapore, Cebu and Shanghai by 2022. Besides the countries where we have lyf, we are exploring to introduce lyf, via investment, management contracts or leases, to key gateway cities in Australia, France, Germany, Indonesia, Netherlands, South Korea and the United Kingdom.
The group acquired Citadines a few years ago, do you plan other external growth?
Citadines is Ascott's fastest growing brand. Since our acquisition of the Citadines Apart'hotel chain in Europe in 2004, we have increased our Citadines-branded properties fivefold to close to 160 Citadines-branded properties with more than 27,000 units globally. These include more than 13,000 units across over 70 properties globally.
Over the years, we have also broadened our range of lodging products to offer not just serviced residences and apartments for corporate lease, but also hotels and coliving properties.
We have introduced new brands in the past few years such as
- The Crest Collection, which comprises some of Ascott’s most prestigious and unique luxury serviced residences,
- lyf, a coliving brand catering to the millennials and millennial-minded, and
- Citadines Connect, a line of business hotels with select services.
To scale up our global presence, we also took a majority stake in market leaders such as Quest Apartment Hotels, the largest serviced residence provider in Australasia, Synergy Global Housing, a leading accommodation provider in the U.S., as well as TAUZIA Hotel Management, one of Indonesia’ top five hotel operators.
We will continue to explore new lodging segments and platforms where we can quickly scale up and keep ahead of the competition in the long term.
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