Australia: Ascott has bought a 60 per cent top-up stake in Quest Apartment Hotels, giving it a total holding in the company of 80 per cent.
The acquisition, valued at AUS$180 million, extends a strategic partnership between the two businesses announced three years ago, at which time Ascott acquired a 20 per cent stake in Quest.
Quest founder and chairman Paul Constantinou said: “Quest will now further leverage the strength of Ascott’s globally recognised, award-winning brands and fast track its international expansion, whilst maintaining its successful franchise format business, along with the value and integrity of the Quest brand. The company now has the capability to offer customers a true global accommodation solution for both transient and extended stay requirements, and will allow Quest to fast track the growth of the brand as a unique franchising platform into global markets.”
Constantinou will retain 20 per cent shareholding in the business, and will remain chair for the next five years, maintaining responsibility for the direction of the growth of the business.
Ascott CEO Lee Chee Koon said the acquisition will establish Ascott as the leading serviced residence provider in Australasia.
“This acquisition will give Ascott an instant boost of over 11,000 units in Australasia. Scale is important for us to offer more options to customers, strengthen our sales and distribution, and help speed up Ascott’s growth. Besides entrenching Ascott’s presence in the developed and stable market of Australia, we will be able to capitalise on the established Quest brand and its highly scalable business format franchise systems and know-how, and further apply the franchise platform as a driver of growth for Ascott. Quest also has a strong talent bench that could contribute to Ascott’s global expansion plan,” he said.
Ascott has also acquired its first serviced residence in Brisbane as part of its strategic partnership with Quest. The 100-unit freehold property – to be named Quest Cannon Hill when it opens next year, will be developed on a turnkey basis by an unrelated local property developer for $24 million.
Quest Cannon Hill is the second acquisition under Ascott’s strategic partnership with Quest. In mid-2016, Ascott acquired the 221-unit Quest NewQuay Docklands in Melbourne for $71 million – which will be Quest’s largest property in its network when it opens in 2019.
“With Ascott’s investment in Quest, we can count on our joint capabilities to tap more pipeline opportunities for turnkey delivery of new-build projects as well as ready-operating properties with incumbent leases in Australasia,” said Lee. “Franchise, management contracts, investments, and strategic alliances will continue to be key strategies to solidify Ascott’s lead as we work towards exceeding our target of 80,000 units globally by 2020.”</p
