SINGAPORE - CapitaLand's wholly owned serviced residence arm, The Ascott Ltd, is acquiring an 80 per cent stake in Synergy Global Housing for US$33.7 million (S$46.7 million), thereby tripling Ascott's portfolio in the United States from more than 1,000 units to about 3,000 units.
The move is also the latest in Ascott's acquisition spree to scale up its global presence. Early this month, Ascott announced its acquisition of a majority stake in Quest Apartment Hotels to become the largest serviced residence provider in Australasia.
In May, Ascott Residence Trust announced the acquisition of DoubleTree by Hilton Hotel New York - Times Square South, adding to its two properties in Manhattan - Sheraton Tribeca New York Hotel and Element New York Times Square West hotel. In the same month, Ascott also acquired Hotel Central Fifth Avenue New York, which will be rebranded to Citadines Fifth Avenue New York in 2018.
In addition to Global Solution Centres in Dublin, Ireland, Hyderabad, India and Singapore, Synergy has a strong foothold in the US, where it leases apartments from partners and property owners to rent to corporate clients, said Ascott.
"In particular, this investment will give Ascott an immediate presence and access to corporations based in Silicon Valley, which include high-tech powerhouses boasting achievements and influence that extend well beyond the San Francisco Bay Area," Ascott added in its media release on Monday (July 24).
Said Mr Lee Chee Koon, Ascott's chief executive officer: "Ascott has been a partner of Synergy in cross-selling its units since 2013. We see value in taking a majority stake in Synergy to further increase the scale of our business in the US and to strengthen Ascott's lead globally. With Synergy, it will expand our global cross-selling and distribution network as well as enlarge our talent pool.
"Ascott will also get an uplift by over 2,000 units located predominantly in the US, and increase our global portfolio to close to 70,000 units. We are confident of surpassing our target of 80,000 units well ahead of 2020, as we look at more opportunities to grow through investments, management contracts, franchises and strategic alliances."
The US is Ascott's third largest source market for guests and "we see potential for us to expand further in cities such as New York, Boston, Los Angeles, San Francisco and Washington DC", Mr Lee added.