October 23, 2014 – CapitaLand’s wholly-owned serviced residence business unit, The Ascott, will invest up to A$500 million (S$560 million) in a strategic partnership with Quest Serviced Apartments, Australia’s largest serviced apartment provider with 112 properties.
The money will be used to acquire new properties that Quest will secure for its franchise in Australia over the next five years, Ascott said in a news release on earlier today. Ascott will have the right of first refusal to acquire the properties sourced by Quest. Quest will then provide a lease for the properties, which will be operated under franchises using the Quest brand.
In addition, Ascott said it has signed an agreement to acquire a 20 per cent stake in Quest for A$28.8 million. As part of the agreement, Ascott has the option to increase its stake in Quest to 30 per cent.
Separately, Ascott’s real estate investment trust, Ascott Residence Trust (Ascott Reit), said it will acquire three operating serviced residences in Greater Sydney from Quest for A$83 million. The three properties will continue to be operated under franchises using the Quest brand.