SINGAPORE - CapitaLand's wholly owned serviced residence unit, The Ascott Ltd, as part of its global expansion made entry into South America with franchise agreements for two serviced residences in Sao Paulo, Brazil.
Vitacon, a leading real estate company in Sao Paulo, will franchise and operate the 92-unit Citadines VN Jardins Sao Paulo and 122-unit Citadines VN Faria Lima Sao Paulo. The two serviced residences are scheduled to open in the last quarter of this year and 2020 respectively, Ascott announced on Tuesday (April 4).
Ascott and Vitacon have also signed an agreement with an intent to establish a portfolio of at least 5,000 Citadines-branded units in Sao Paulo.
Said Ascott CEO Lee Chee Koon: "Ascott's entry into South America through franchise is a significant move to expand our global network of properties, and in turn increase our fee income. We see strong potential to scale up Ascott's presence in Brazil given its status as the powerhouse of South America, accounting for close to half of the region's foreign direct investments.
"Anchoring ourselves in Brazil's largest city, we will seek to expand our footprint to other major cities including the capital of Brasilia, Rio de Janeiro and Belo Horizonte. We will also explore opportunities in new markets such as Argentina, Chile and Mexico. In the next five years, Ascott aims to achieve 10,000 units in South America."
Its Citadines network will increase to over 18,500 units in 71 cities, with the addition of the two new serviced residences.
Mr Lee said that the Citadines is Ascott's fastest growing brand having more than tripled its portfolio since the company's acquisition of the Citadines Apart'hotel chain in Europe in 2004. Ascott has since brought the brand to the Asia Pacific, the Middle East and now South America.
He added: "Our strategic partnership with Vitacon provides further impetus for Ascott to expand, given their sizable landbank in prime locations across Sao Paulo, home to many of Brazil's largest multinational corporations and the region's financial hub. There is also a lack of quality accommodation to cater to the needs of expatriates and business travellers. Franchise, investments, management contracts and strategic alliances will continue to be key strategies to boost Ascott's lead as we march towards our target of 80,000 units globally by 2020."
In addition to the facilities and services available at other Citadines properties around the world, the two new serviced residences in Sao Paulo will feature coworking spaces, shared amenities such as bikes, cars, and motorcycles, as well as common spaces like cafés, gymnasiums and storage spaces.
Headquartered in Brazil, Vitacon has launched 40 residential and commercial projects delivering an estimated US$1 billion in sales, of which 25 projects have been completed. Vitacon also manages about 1,200 furnished apartment units for lease in Sao Paulo.