Leading serviced residence owner-operator The Ascott is acquiring its first serviced residence in Docklands, Melbourne through a 50:50 joint venture with Qatar Investment Authority (QIA).

The A$71 million deal is part of its A$500 million strategic partnership with Quest Apartment Hotels (Quest), one of the largest serviced apartment operators in Australia.

Quest will lease the 221-unit serviced residence, which will be named Quest NewQuay Docklands, and operate it under Quest’s franchise when the property opens in 2019. Quest NewQuay Docklands will be Quest’s largest property in its network.

Ascott’s serviced residence global fund was set up through a 50:50 joint venture with QIA in July 2015 with each contributing $300 million of equity funds to the joint venture.

The fund invests in serviced residences and rental housing properties with an initial focus on Asia Pacific and Europe. Ascott’s four acquisitions made in partnership with QIA have a total investment amount of US$270 million and would be funded partly by debt.

Lee Chee Koon, Ascott’s chief executive officer, said: “Ascott is a global serviced residence leader that owns and manages over 46,000 units worldwide and we have a strong base of customer accounts that are multinational companies, while Quest is a leading operator in Australia with more than 80% of its customers from Australia’s top companies. Through our strategic partnership with Quest, we can combine our expertise to drive Ascott’s expansion in Australia and enjoy stable income as Quest will provide fixed leases for the properties and operate them under its well-established franchise. By taking a stake in Quest, Ascott also stands to benefit from the growth of the Quest franchise. 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.”

Through the Ascott-Quest alliance formed in late-2014, Ascott will invest up to A$500 million in new properties that Quest will secure for its franchise in Australia until 2019.

Paul Constantinou, chairman of Quest Apartment Hotels, said: “Demand for accommodation in Australia from both international and domestic corporate customers remains strong but the supply of new accommodation has been lacking. Melbourne’s accommodation sector has been getting high occupancies of above 80 per cent, driven by its strong events calendar, growing convention market and business activities. Ascott’s investment will not only enable us to accelerate Quest’s growth to cater to the demand in Australia, our tie-up with Ascott also provides a solid platform for us to take the Quest brand overseas.”

In Australia, Ascott currently manages five serviced residences with more than 670 apartment units in Melbourne, Perth and Hobart under the Citadines and Somerset brands. Quest has more than 150 properties with over 8,000 existing units in Australia, New Zealand and Fiji, and a further 1,500 units under construction. - TradeArabia News Service