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23-10-2014, 11:18 PM
Quest’s $500m Singapore deal to drive site rollout
THE AUSTRALIAN OCTOBER 24, 2014 12:00AM
Sarah Danckert
Property Reporter
Melbourne
Paul Constantinou, chairman of Quest Apartments complex at Docklands in Melbourne. Picture: David Geraghty
Quest chairman Paul Constantinou. Quest says the Ascott deal is crucial. Picture: David Geraghty Source: News Limited
SERVICED apartment operator Quest has signed a $500 million development deal with Singapore’s The Ascott Limited that will see the rollout of 20 new properties over the next five years.
The Ascott has also taken a 20 per cent stake in Quest for $28.8m, while its subsidiary Ascott Residence Trust has bought three serviced apartment towers from Quest for $83m as part of the transaction.
The deal marks the return of Singapore’s Capitaland, which owns The Ascott and manages the listed Ascott Residence Trust, into Australia following its selldown of its 60 per cent stake in Australand in 2012.
Quest chief executive Zed Sanjana said its search for a property partner to help it grow its business was the reason behind the group’s appointment of Goldman Sachs last year — an appointment that led to speculation the group was considering a float on the Australian Securities Exchange.
“In terms of our aspirations to IPO (initial public offering) we don’t really have any at this stage,” Mr Sanjana said. “If we were going to do it we would have done it by now because it’s not a bad market and would have done well off the back of the Mantra IPO,” he said.
Mr Sanjana said the deal with Ascott would bring in institutional firepower to help the group grow its business in a market where demand was brimming but supply of new property was low.
“The challenge for most hotel and service apartment operators is bringing supply to market.
“They’re obviously high capital-intensive properties to put up so it’s important to find a capital partner that can support your aspirations to grow.”
On top of the five new properties that will be developed under The Ascott partnership, Quest will also continue to roll out about eight new properties a year with other partners.
The first stage of the joint venture agreement will focus on building Quest’s network of serviced apartments in Australia and New Zealand.
Down the track, The Ascott and Quest could take their partnership into new markets including Asia, Mr Sanjana said. Under the partnership, Ascott Residences has purchased Quest’s properties at Mascot Airport, Sydney Olympic Park and Campbelltown.
The developments undertaken by the joint venture partnership will be owned by Ascott Residences and leased to Quest.
Quest, which focuses on the corporate travel market and longer-stay guests, plans to target the NSW, Queensland and Perth markets under its partnership with Ascott.
The Ascott Limited operates 200 serviced apartment and hotel properties under three brands — Ascott, Citadines and Somerset — including five properties in Australia.
“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,” The Ascott chief executive Lee Chee Koon said. “We also expect a stronger pipeline of properties in Australia for Ascott to acquire.”
THE AUSTRALIAN OCTOBER 24, 2014 12:00AM
Sarah Danckert
Property Reporter
Melbourne
Paul Constantinou, chairman of Quest Apartments complex at Docklands in Melbourne. Picture: David Geraghty
Quest chairman Paul Constantinou. Quest says the Ascott deal is crucial. Picture: David Geraghty Source: News Limited
SERVICED apartment operator Quest has signed a $500 million development deal with Singapore’s The Ascott Limited that will see the rollout of 20 new properties over the next five years.
The Ascott has also taken a 20 per cent stake in Quest for $28.8m, while its subsidiary Ascott Residence Trust has bought three serviced apartment towers from Quest for $83m as part of the transaction.
The deal marks the return of Singapore’s Capitaland, which owns The Ascott and manages the listed Ascott Residence Trust, into Australia following its selldown of its 60 per cent stake in Australand in 2012.
Quest chief executive Zed Sanjana said its search for a property partner to help it grow its business was the reason behind the group’s appointment of Goldman Sachs last year — an appointment that led to speculation the group was considering a float on the Australian Securities Exchange.
“In terms of our aspirations to IPO (initial public offering) we don’t really have any at this stage,” Mr Sanjana said. “If we were going to do it we would have done it by now because it’s not a bad market and would have done well off the back of the Mantra IPO,” he said.
Mr Sanjana said the deal with Ascott would bring in institutional firepower to help the group grow its business in a market where demand was brimming but supply of new property was low.
“The challenge for most hotel and service apartment operators is bringing supply to market.
“They’re obviously high capital-intensive properties to put up so it’s important to find a capital partner that can support your aspirations to grow.”
On top of the five new properties that will be developed under The Ascott partnership, Quest will also continue to roll out about eight new properties a year with other partners.
The first stage of the joint venture agreement will focus on building Quest’s network of serviced apartments in Australia and New Zealand.
Down the track, The Ascott and Quest could take their partnership into new markets including Asia, Mr Sanjana said. Under the partnership, Ascott Residences has purchased Quest’s properties at Mascot Airport, Sydney Olympic Park and Campbelltown.
The developments undertaken by the joint venture partnership will be owned by Ascott Residences and leased to Quest.
Quest, which focuses on the corporate travel market and longer-stay guests, plans to target the NSW, Queensland and Perth markets under its partnership with Ascott.
The Ascott Limited operates 200 serviced apartment and hotel properties under three brands — Ascott, Citadines and Somerset — including five properties in Australia.
“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,” The Ascott chief executive Lee Chee Koon said. “We also expect a stronger pipeline of properties in Australia for Ascott to acquire.”