Ascott, the serviced residence unit of CapitaLand, plans to use proceeds from the sale of 28 assets to its listed unit Ascott Residence Trust for expansion, said Mark Chan, senior vice-president for business development and asset management at Ascott.
“In the past year or so, we have been looking for opportunities to invest as well as divest,” said Mr. Chan at the Serviced Apartments Asia conference. Ascott sold the assets to Ascott Residence Trust for $969.6 million last month.
Mr. Chan added that the company is searching for opportunities to recycle capital and looking for investments with good returns.
Other service residence firms at the conference also said they are venturing out for expansion.
Frasers Hospitality, the service residence unit of conglomerate Fraser and Neave, plans to open another nine service residences under its Modena brand over the next 12 months, said chief executive Choe Peng Sum.
The group launched the Modena brand in July 2009, and since then, it has opened two developments in Tianjin and Shanghai under that brand.
In an attempt to branch out into the four-star boutique service residence segment, Frasers will launch another nine properties in several Chinese cities, Hanoi, Kuala Lumpur and Singapore within the next year, said Mr. Choe during the conference.
“This is one market we want to get into very very strongly,” he said.
With the Modena name, the company will offer “four-star boutique hotel residences for extended stay”.
The properties, which will comprise mainly studios and one-bedroom units, will be less luxurious compared to those under the Frasers brand.
The residences, which will cater to short-stay travellers and young executives, will have hotel licenses rather than service apartment licences, allowing them to host travellers for shorter periods of stay.