Quest Serviced Apartments is set to rapidly expand its network following the announcement of a major strategic partnership with one of the world’s largest serviced apartment owner-operators – Singapore based The Ascott Limited.
The deal will see a $500-million investment in new Quest properties across Australia over the next 5 years, fast-tracking the company’s plans to expand the network to over 250 properties by the end of the decade.
The Ascott Limited is a wholly-owned subsidiary of Singapore-listed company, CapitaLand Limited – one of Asia’s largest real estate companies. The Ascott Limited operates under three international brands – Ascott, Citadines and Somerset, with over 200 properties globally, including five in Australia.
The partnership includes Ascott Residence Trust (a listed Real Estate Investment Trust on the Singapore Exchange) acquiring a $83-million portfolio of Australian assets comprising three Quest properties in NSW located at Mascot Airport, Sydney Olympic Park and Campbelltown. These will continue to be operated and leased back long-term under the Quest brand and franchise platform. In addition, Ascott will become a minority JV partner within Quest.
Following the announcement on the Singapore Exchange this morning, Quest CEO Zed Sanjana shared the news with the Quest Franchise Network at the company’s national conference in Melbourne this morning.
He said the strategic partnership was a transformational opportunity for Quest; which would result in both accelerated growth of the brand’s Australian footprint, as well as fast tracking Quest’s global expansion.
“This will provide us with an opportunity to accelerate our organic growth over the next 5 years to take advantage of the strong demand dynamics in the Australian accommodation market,” Sanjana explained.
“We will now move quickly to close out a number of deals in our pipeline, by providing greater certainty to our Development Partners.”
The strategic partnership also provides the opportunity for joint initiatives across sales, marketing and distribution; given both company’s strong common focus on the global mobility market and extended stay corporate customer.
Whilst Quest has opened an average of 8 new properties per year for over a decade, the strategic partnership will enable Quest to accelerate its annual growth by an additional 20 new properties over the next five years.
“The $500-million future commitment by The Ascott Limited and portfolio acquisition by Ascott Residence Trust, demonstrates the growing investment appetite in this asset class from global institutional investors, and their confidence in the strength of the Australian accommodation market,” Sanjana said.
The Ascott Limited CEO Lee Chee Koon welcomed the partnership with Quest.
Mr Lee said: “Ascott has an established presence in Australia where our serviced residences enjoy a strong demand from travellers to the country, and we see vast potential growth opportunities for serviced residences. Ascott has many global customer accounts and strong global systems to manage our properties. Through our strategic partnership with Quest, we can leverage each other’s knowledge and contacts in Australia to rapidly extend our presence in the growing market for international quality serviced apartments. We also expect a stronger pipeline of properties in Australia for Ascott to acquire.”
“Foreign investment in Australia’s accommodation sector has been on the increase in recent years due to the reliable legislative environment, resilient economy and stable returns in Australia,” Mr Lee said.
“We look forward to closer collaboration with Quest in cross selling, conducting joint marketing initiatives, and jointly exploring franchising opportunities outside of Australia.”