Ascott to buy Wilkie Road serviced apts for $79m

THE Ascott Group has agreed to buy a 99-year leasehold serviced residence in town for $79.3 million, the company announced yesterday.

The property, located at Wilkie Road, is part of lifestyle complex Wilkie Edge, which is under construction. Wilkie Edge is a mixed development consisting of offices, retail, and food and beverage outlets.

The acquisition, to be funded from internal resources and external borrowings, will bring Ascott’s property portfolio in Singapore to 11, with a combined 1,042 units. It will be named Citadines Singapore Mount Sophia and open in the first half of 2009.

‘Citadines Singapore Mount Sophia is strategically located in the heart of Singapore’s upcoming arts, learning and entertainment hub in the Bras Basah-Bugis area,’ said Ascott president and CEO Jennie Chua. ‘It is in the city centre with excellent access to the central business district and the shopping and entertainment attractions of Orchard Road.’

The Ascott Group had earlier inked a memorandum of understanding to manage Wilkie Edge’s serviced residences for an initial 10-year term with an option to extend it for another 10 years.

‘Strong demand for extended-stay accommodation, the vibrant real estate market, and the property’s attractive location are reasons for Ascott to acquire leasehold interests in the serviced residence instead of only managing the property for fee income,’ added Ms Chua. ‘This will enable us to maximise shareholder returns.’

The new property will have 154 units and be Ascott’s first Citadines-branded serviced residence in Singapore. It will cater to the young and trendy, expatriates working in the creative services community as well as foreign students and academics from the nearby Singapore Management University, Nanyang Academy of Fine Arts and LaSalle College of The Arts.

The acquisition agreement is inked between Ascott’s indirect wholly owned subsidiary Ascott Scotts Pte Ltd, CapitaLand Selegie Pte Ltd and HSBC Institutional Trust Services, which is the trustee of CapitaCommercial Trust (CCT).

Just last month, CCT had announced that it is buying Wilkie Edge for $262 million. The pact comes with an option to lease the serviced apartments for a $79.3 million consideration. When this option is exercised, CCT’s purchase price for Wilkie Edge will be reduced to $182.7 million.

Source : Business Times – 30 Aug 2007

Ascott’s new flagship to offer unmatched luxury

THE Ascott Group will lose the management of its flagship Ascott Singapore on Scotts Road at the end of this year, but the listed service residence company is pulling out all the stops to make a recently acquired building its new flagship property.

Last week, Ascott chief executive Cameron Ong announced that his company will spend $50 million to transform the historic Asia Insurance Building (AIB) into the top-of-the-line Ascott Singapore Raffles Place.

When ready in the first half of 2008, the 154-unit Ascott Raffles Place will ‘redefine the concept of luxury living’, said Ascott.

‘Ascott Raffles Place will have a commanding view of the Marina Bay integrated resort,’ says Mr Ong.

‘It has an unbeatable prime address between the old and new business and financial districts, and the facilities and finishing will give travellers to Singapore a new level of luxurious living,’ he added.

AIB is located on Finlayson Green, so once the service apartments are up, travellers who stay there will be close to Raffles Place MRT and the upcoming Business and Financial Centre.

Collyer Quay, which is slated to be developed into a ‘lifestyle hub’ with a mix of restaurants, shops and entertainment outlets, is also just a stone’s throw away.

Perhaps because of this, Ascott is hoping to charge as much as $700 per night for Ascott Raffles Place.

For that amount, visitors will get to stay in one of 154 luxuriously-furnished suites in varying sizes – ranging from about 50 square metres m for a junior suite to 180 sq m for a three-bedroom premier suite.

Each suite will offer up to 50 per cent more space compared to a typical hotel suite, said Ascott.

Facilities include a rooftop pool that will offer an infinity view of the upcoming integrated resort, a bar and lounge, a deli and fine dining restaurant.

Market watchers had been expecting Ascott to unveil plans for a new flagship property ever since the company announced in 2004 that it had sold its Scotts Road building to Wheelock Properties.

The lease for its service apartments there ends at the end of this year.

Earlier this year, Ascott spent $109.5 million to acquire AIB. At 20 storeys, the building was South-east Asia’s tallest when it was built in 1923.

To honour its heritage, Ascott will not tear the place down; rather, it will ‘restore the landmark’s former glory’, and preserve the facade to retain the building’s character.

In line with this, Ascott Raffles Place will showcase Singapore artworks through possible collaboration with the Singapore Art Museum, the company said.

Source : Business Times – 3 Oct 2006

Ascott to open 3 new Singapore properties

SERVICE apartment operator The Ascott Group yesterday said it would open three more properties here by the end of 2008.

This will add about 500 service apartment units to its current portfolio, and is in line with the group’s plan to have 1,600 units in Singapore by 2010.

With the additions, Ascott will have 1,357 units in 13 properties here.

Of the three new properties, two will come under the group’s recently- acquired Citadines label, marking the European value-for-money brand’s first entry into Singapore.

Ascott operates service apartments under three brand names: Ascott, Somerset and Citadines.

The 148-unit Citadines Scotts will take the place of Hotel Asia in Scotts Road, which Ascott bought for $108 million in July, while the 160-unit Citadines Mt Sophia will be located at the Selegie Complex site currently being developed by Ascott’s parent CapitaLand.

The third property will assume the group’s top- tier Ascott label and have 154 units, all suites. Ascott will convert the Asia Insurance Building, which it paid $109.5 million for, into Ascott Raffles Place.

This will replace the group’s flagship property, The Ascott Singapore at Scotts Shopping Centre in Scotts Road, which Ascott sold to Wheelock Properties in June 2004. Ascott’s lease on that property was due to expire at year-end.

Ascott will spend $60 million in all to convert Hotel Asia and Asia Insurance Building into service apartments, the group said at a briefing yesterday.

It decided to refurbish the properties rather than tear down and redevelop them so that they can be opened sooner, said Ascott chief executive Cameron Ong.

Citadines Scotts will be opened by the middle of next year, while the other two will be ready in 2008.

This is to beat the onslaught of new hotel rooms that is expected in a few years’ time, with the Government releasing a slew of hotel sites this year, Mr Ong added.

He also said that Ascott Raffles Place will be injected into the group’s property trust ‘definitely within the next five years’. This fits Ascott’s ‘asset-light’ strategy to free up capital for new acquisitions.

As for Citadines Scotts, Ascott may explore other options, such as selling or developing it.

‘Property prices are still moving up, and Citadines Scotts is such a prime site, so I think Ascott has a lot of options for the property,’ he said.

Source : Straits Times -29 Sep 2006

Ascott buys 2 prime properties for $218m in expansion drive

THE Ascott Group is paying $217.5 million to acquire two prime properties that will be turned into service apartments to meet surging demand from long-stay visitors and expatriates.

Its acquisitions, due to be completed in about three weeks, are part of the group’s strategy to double its local portfolio to 1,600 units by 2010.

The most prominent property is the 20-storey Asia Insurance Building at Finlayson Green – at one time, one of South-east Asia’s tallest buildings.

Ascott will pay the Asia Life Assurance Society $109.5 million for the block, which it aims to turn into a luxury property of about 100 units targeted at corporate travellers. It will be known as Ascott Raffles Place.

‘It will be the flagship property of our Ascott global brand. It will be the best property that we have,’ said managing director and chief executive officer Cameron Ong.

The other property – Hotel Asia on Scotts Road – was believed to have been fought over by about 20 developers, including the giant Lippo Group, before Ascott secured it for $108 million. This figure includes $4.3 million for the hotel management company.

Ascott, the service residence arm of property giant CapitaLand, will retain the staff and run the hotel for a year or so, said Mr Ong. But the property will likely house another Ascott brand project or one under its upper-tier Somerset brand.

The two properties will eventually add about 300 or more units to Ascott’s local portfolio.

Mainboard-listed Ascott is already the world’s largest service residence owner-operator outside the United States. Its acquisitions come at a time when the service apartment sector here is experiencing rising occupancies and rates.

Tourism is also poised for increased growth with a government initiative to double visitor arrivals to 17 million by 2015 and triple tourism receipts to $30 billion by 2015.

Ascott chairman Lim Chin Beng said: ‘In recent years, the supply of high-end, good quality accommodation in Singapore has been reduced as a number of four- and five-star hotels have been converted into condominiums.’’

With the Government’s efforts to attract more visitors, Ascott’s proposed acquisitions will be ‘timely’ to cater to the expected rise in demand for good quality accommodation for extended stay, he said.

Ascott Raffles Place will replace the firm’s only Ascott-branded property here, The Ascott Singapore in Scotts Road, which was sold together with Scotts Shopping Centre to Wheelock Properties in 2004.

Mr Ong described the proposed Ascott Raffles Place as the ‘best place’. It will be near one of the integrated resorts, well-placed for the central business district (CBD) and near Collyer Quay, which will be redeveloped into a lifestyle hub.  ‘The whole place will be revitalised and that will give us a very good platform to bring back life to the CBD area,’ said Mr Ong.

The project will see the Asia Insurance Building, erected in the early 1950s and famed across the region for its height, refurbished and brought back to its former glory, added Mr Ong. The 999-year leasehold office building has a gross floor area of about 150,000 sq ft. Ascott’s purchase price works out to $727 per sq ft.

Its price for the freehold Hotel Asia is about $720 psf of potential gross floor area.

Hotel Asia has a potential gross floor area of about 150,700 sq ft and a land area of around 35,900 sq ft. Ascott’s plan, said Mr Ong, is to enhance the two properties and hold them before they are ready to be injected into its pan-Asian real estate investment trust called Ascott Residence Trust.

On another front, Ascott will soon announce plans for a Citadines property here, catering for about 180 units. Citadines is a European value-for-money brand that Ascott acquired in 2004. It is employing it in its expansion plans in Asia.

Ascott, whose global portfolio now totals more than 16,000 units, is targeting to achieve 25,000 units by 2010.

Source : Straits Times – 5 July 2006