CapitaLand to invest in 'China's Airbnb'

A serviced apartment in the newly opened Ascott Heng Shan Shanghai. Ascott has over 14,000 apartments across 24 cities in China.
A serviced apartment in the newly opened Ascott Heng Shan Shanghai. Ascott has over 14,000 apartments across 24 cities in China.PHOTO: THE ASCOTT

Serviced residence arm Ascott leads group investing $69m in online platform Tujia

CapitaLand's serviced residence arm, The Ascott, is leading a consortium to invest US$50 million

($68.6 million) in an online apartment-sharing platform that has been dubbed China's Airbnb.

Other investors in the consortium are institutional, corporate and high-net worth investors.

Ascott will also form a joint venture with Tujia, as the firm is called, with an initial capital of US$40 million.

The joint venture led by Ascott will operate and franchise serviced apartments in China.

CUSTOMER INSIGHT

With the wealth of experience and fresh perspectives from the council members, CapitaLand will gain much insight on using digital technology to decode the art of human needs and wants, so that we can create smart buildings for smart customers.

MR LIM MING YAN, CapitaLand president and group chief executive

Tujia's apartment-sharing site, which has been valued at over

US$1 billion, caters to leisure and business travellers looking for alternatives to hotels, in and outside of China.

Its website has over 310,000 apartments in 388 travel destinations across China, as well as overseas destinations for Chinese outbound travellers, including Bangkok, Singapore and Tokyo.

Tujia also operates some apartments for owners and franchises its business to third-party operators.

In a separate announcement yesterday, Tujia said it has raised US$300 million for overseas expansion. The investors reportedly include All-Star Investment and Ctrip.com International.

As part of the joint venture, Ascott will operate serviced apartments in the key growth cities of China using a new brand, said CapitaLand. This will include newly sourced properties and Tujia's serviced apartments in China that are deemed suitable for conversion.

"Ascott's existing three brands - Ascott, Citadines and Somerset - target the top-tier segment of the market and are already well established with our customers in China," said an Ascott spokesman.

"The new brand of serviced residences will cater to the growing mid-tier segment of domestic travellers in China."

DBS Group Research analyst Derek Tan said the move will help Ascott expand its addressable market, as well as get a sense of how consumer travel trends are.

Ascott chief executive Lee Chee Koon said that apartments under the firm's three serviced residence brands will be available for booking on Tujia's website.

"Through Ascott's joint venture with Tujia, we will be able to quickly scale up our presence in China to 20,000 units by 2020," he said.

Ascott has over 14,000 apartment units in 77 properties across 24 cities in China.

CapitaLand also announced that it has formed a technology council to boost its digital capabilities.

Council members include Mr Foo Jixun, managing partner of GGV Capital; Mr David Su, managing partner of Matrix Partners China; and Mr Gabriel Lim, chief executive of the Media Development Authority of Singapore.

Boosting its digital capabilities will allow the company to use technology "to decode the art of human needs and wants... (and) create smart buildings for smart customers", said Mr Lim Ming Yan, CapitaLand's president and group chief executive.

A version of this article appeared in the print edition of The Straits Times on August 04, 2015, with the headline 'CapitaLand to invest in 'China's Airbnb''. Print Edition | Subscribe