The Ascott serviced apartment chain has made its first foray into South America, where it aims to have a portfolio of 10,000 units within the next five years.
The firm, a unit of mainboard-listed CapitaLand, said yesterday that it will partner Vitacon, a Brazilian real estate company, to franchise and operate two Citadines-branded complexes in Sao Paulo, the financial centre of Brazil.
A 92-unit complex is scheduled to open in the last quarter of this year while another with 122 apartments will open in 2020. Ascott and Vitacon have also signed an agreement to establish a portfolio of at least 5,000 Citadines-branded units in Sao Paulo.
But these are just the tip of the iceberg, as Ascott has more plans in store. Chief executive Lee Chee Koon said it aims to have 10,000 units in South America by 2022.
"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," he added.
"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."
Mr Lee said Ascott will also explore opportunities in Argentina, Chile and Mexico.
The two new serviced residences in Sao Paulo mean Ascott's Citadines network will increase to more than 18,500 units in 71 cities.
Mr Lee said Citadines is Ascott's fastest-growing brand, tripling its portfolio since it acquired European serviced apartment chain Citadines in 2004.
He added that franchise, investments, alliances and management contracts will be key strategies as Ascott moves towards its target of 80,000 units by 2020.
Vitacon, Ascott's partner, is a leading Brazilian property company founded in 2009. Vitacon has generated US$1 billion (S$1.4 billion) in sales from 40 residential and commercial projects, and also manages about 1,200 apartment units for lease in Sao Paulo.
Ascott's latest tie-up and its ambition in South America are in line with its aggressive expansion plans: It added 10,000 units to its portfolio last year and has been ramping up its partnerships.
Last month, it opened the 130-unit Ascott Marunouchi Tokyo property. It also signed a deal in January to add six new China properties to its portfolio.
To drive its expansion, it appointed Mr Kevin Goh as chief operating officer in January to assist Mr Lee in new growth opportunities.
The Ascott operates over 30,000 serviced residence units, has an additional 22,00 units under development, and owns five brands - Ascott, Citadines, Somerset, The Crest Collection and Lyf - spanning more than 100 cities.