Ascott secures first franchise agreements
CapitaLand’s wholly-owned serviced residence business unit, The Ascott Limited (Ascott), has secured its first franchise agreements in Vientiane, the capital city of Lao People’s Democratic Republic (Laos), and Bali, Indonesia. The agreements are for an operating serviced residence in Vientiane that will be rebranded as a 116-unit Somerset Vientiane in the fourth quarter of 2014, and a 194-unit Citadines Kuta Beach Bali that is scheduled to open in August this year.
Mr Lee Chee Koon, Ascott’s Chief Executive Officer, said: “These franchise agreements mark a new milestone for Ascott. Since opening our first property in Singapore 30 years ago, Ascott has grown to be the world’s largest international serviced residence owner-operator. We have built sound hospitality management systems, an extensive sales and distribution network, strong brand recognition and loyalty globally. Franchise will be one of Ascott’s growth drivers for the future. It will allow us to build our scale rapidly in our existing markets and expand into new markets. Through the franchise agreements, we have added two more cities to our portfolio to reach 85 cities worldwide. Together with investments, management contracts and strategic alliances, franchise will bring us closer to achieving our target of 40,000 apartment units globally by 2015.”
He said: “We are excited to bring our Somerset brand to Laos, which has been attracting foreign direct investments in its natural resources and hydropower sectors. As the Laos government pushes for more economic reforms and creates more special economic zones across the country, the number of expatriates and corporate travellers in the economic hub of Vientiane will increase. This will generate significant demand for our serviced residence, especially since there is a lack of international-class serviced residences in Vientiane.”
Mr Lee added: “While most of our guests are expatriates and business travellers on extended stay, more leisure travellers are also choosing to stay in Ascott’s serviced residences. Bali is a popular destination for holiday, meetings and conferences. With Citadines Kuta Beach Bali, our guests can enjoy the familiar homely environment that Ascott provides in another renowned destination. It will also further reinforce Ascott’s position as the largest international serviced residence owner-operator in Indonesia with over 2,400 apartment units across 11 properties in Jakarta, Surabaya and Bali.”
Ascott awarded the franchise for Somerset Vientiane to a subsidiary of LCD Global Investments Ltd, a real estate and hospitality group listed on the Singapore stock exchange. Under the agreement, the serviced residence will be managed by Ascott for the first two years to ensure that it is refurbished to Somerset brand standards before transitioning to a franchise arrangement. The franchise for Citadines Kuta Beach Bali was awarded to PT Menara Permata Propertindo. Ascott is also managing Somerset Kencana Jakarta for the company and the property is slated to open in 2015.