SINGAPORE (June 21): The Ascott Limited, CapitaLand’s wholly owned serviced residence business unit, announced on Monday it has secured seven new properties with 1,714 units across seven cities in Asia.
These are Karawang in Indonesia; Putrajaya in Malaysia; Danang in Vietnam; Tokyo in Japan; and Changsha, Shanghai and Shaoxing in China.
Management says that the seven new serviced residences should deepen Ascott’s presence in Southeast Asia which remains the company’s fastest growing market as well as other cities such as Danang, Changsha, Shanghai and Tokyo.
Meanwhile, the 124-unit Somerset Ginza East Tokyo is slated to open in July this year while the 135-unit Citadines Festive Walk Karawang, 550-unit Citadines Blue Cove Danang, 180-unit Citadines Xingsha Changsha and 250-unit Citadines Keqiao Shaoxing will be opening in 2018.
The 200-unit Somerset West Hongqiao Shanghai will welcome its first guests in 2019 while the 275-unit Somerset Putrajaya is expected to open in 2020.
In a Tuesday research note, Lim & Tan Securities’ Singapore research team says Ascott is set to continue this expansion momentum for the rest of the year and is poised to outpace its growth in 2015. In fact, it has already secured a total of 6,700 units in 26 properties in the first six months of this year.
In the longer-term, Ascott looks to be on track to achieve its target of 80,000 units globally by 2020 as it will also be looking to establish more strategic alliances with partners and seek more investment opportunities, management contracts and franchises, adds Lim & Tan.
“We believe the addition of these seven management contracts will further boost CapitaLand’s recurring income from management fees going forward. Trading at 30% discount to book value and supported by decent yield of 3%, we continue to reiterate our buy call on CapitaLand,” says the Singapore research team.
At 11.01am, shares of CapitaLand are down 0.33% at S$3.01. — theedgemarkets.com
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