CapitaLand’s wholly owned serviced residence business unit, Ascott, is investing US$26 million for a 70 per cent stake in Green Oak Hotel Management, the holding company for Tauzia Hotel Management (Tauzia).
This is Ascott’s first major move into the lodging segment beyond its core serviced residence business and existing business in apartments for corporate lease.
With its investment in Tauzia, Ascott will get an instant boost of close to 20,000 units spanning 122 hotels across Indonesia, Malaysia and Vietnam, half of which are under development. This puts Ascott’s portfolio at more than 94,000 units globally, surpassing its 2020 target of 80,000 units.
Kevin Goh, Ascott’s CEO, said in a statement: “Tauzia’s fastest growing mid-tier business hotels will enable us to capture the ballooning middle-class segment in Asia, which will be home to two-thirds of the world’s middle-class by 2030.
“Prior to our investment in Tauzia, we have 10 business hotels with about 2,000 keys in our portfolio. On top of the units under Tauzia, we see potential to add another 20,000 keys over the next five years across South-east Asia. This will increase our hotel portfolio to over 41,000 keys, constituting about 25 per cent of our 160,000-unit target by 2023.”
The majority of Tauzia’s portfolio are located in Indonesia, with close to 60 per cent in key cities such as Jakarta, Bali, Bandung, Surabaya and Yogyakarta. About 70 per cent of Tauzia’s hotels cater to business and convention travellers, while 30 per cent are targeted at leisure travellers.
Tauzia has six in-house lifestyle brands, comprising the mid-tier Harris Hotels; Fox Harris Hotels; Yello Hotels; economy POP! Hotels; upscale boutique hotels Tauzia’s Préférence brand; and high-end business Harris Vertu Hotels.
In Indonesia, Ascott has 17 serviced residences and more than 3,000 units across Jakarta, Bali, Bandung, Karawang, Makassar, Surabaya and Yogyakarta.