Ascott is acquiring an additional 60 per cent stake in Quest Apartment Hotels for A$180 million (US$137 million), which will increase its stake from the current 20 per cent to 80 per cent. Also part of the deal is an option for Ascott to acquire the remaining 20 per cent interest in Quest.
The acquisition will boost Ascott’s portfolio by over 11,000 units to more than 67,000 units across 507 properties and 124 cities globally.
100-unit Quest Cannon Hill to open next year
Lee Chee Koon, Ascott’s CEO, said: “Increasing our stake in Quest to become its majority shareholder will leapfrog Ascott to become the leading serviced residence provider 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.”
The move will also allow Ascott to leverage the Quest brand and its “highly scalable business format” to further apply the franchise platform as a growth driver.
Quest has 180 properties with over 9,000 existing units in Australia, New Zealand and Fiji, and over 2,000 units under construction.
In addition, Ascott has acquired its first serviced residence in Brisbane from a local property developer for A$24 million as part of its strategic partnership with Quest, bringing its portfolio to 10 serviced residences with over 1,300 units in Australia.
The 100-unit freehold serviced residence, to be developed on a turnkey basis and operate as a Quest franchise, will open in 2018.
Quest Cannon Hill is the second acquisition made under the partnership. In mid-2016, Ascott acquired the 221-unit Quest NewQuay Docklands in Melbourne for A$71 million, which will reopen in 2019 as Quest’s largest property.
“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,” Lee said.