SINGAPORE - Serviced apartment operator The Ascott Limited has signed its first franchise agreements in Vientiane, Laos and Bali, Indonesia, it said on Thursday.
The Vientiane agreement is for a 116-unit operating serviced residence in the city that will be rebranded as a Somerset Vientiane in the fourth quarter of this year. Ascott awarded the franchise for this property to a subsidiary of LCD Global Investments, a real estate and hospitality group listed in Singapore.
Under the agreement, the serviced residence will be managed by Ascott for the first two years to ensure that it is refurbished to Somerset brand standards before LCD's subsidiary takes over as a franchisee.
The Bali property is a 194-unit serviced residence that will be called the Citadines Kuta Beach Bali and is scheduled to open in August this year. The franchise for this property was awarded to PT Menara Permata Propertindo.
Ascott, which is wholly owned by CapitaLand, said the franchise agreements mark a new milestone for the company.
"Franchise will be one of Ascott's growth drivers for the future. It will allow us to build our scale rapidly in our existing markets and expand into new markets," said Mr Lee Chee Koon, Ascott's chief executive officer.
"Through the franchise agreements, we have added two more cities to our portfolio to reach 85 cities worldwide. Together with investments, management contracts and strategic alliances, franchise will bring us closer to achieving our target of 40,000 apartment units globally by 2015."
Mr Lee added that Laos is expected to see a "significant demand" for serviced residences, as the country undergoes economic reforms and attracts more expatriates and corporate travellers to Vientiane.
"This will generate significant demand for our serviced residence, especially since there is a lack of international-class serviced residences in Vientiane," he said.