Ascott acquires 80% stake in US Synergy Global Housing

SINGAPORE — The Ascott, CapitaLand’s wholly owned serviced residence arm, is acquiring an 80 per cent stake in the US-based corporate accommodation company Synergy Global Housing for S$46.7 million (US$33.7 million), tripling its portfolio to about 3,000 units in the US.

The deal comes close of the heels of Ascott acquiring an additional 60 per cent stake in Quest Apartment Hotels for S$191 million (A$180 million), increasing its holding in the company to 80 per cent, to become Australia’s largest serviced residence provider.

“The synergies to be realised with these majority-stake acquisitions will propel Ascott’s growth at an unprecedented pace,” Ascott’s chief executive Mr Lee Chee Koon said, highlighting that the idea is to become a dominant player in the hospitality eco-system while scaling up business in the US and strengthening its presence globally.

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 property owners to rent to corporate clients. With the investment in Synergy, Ascott aims to gain an immediate presence and access to corporations based in Silicon Valley including high-tech powerhouses.

“We will have direct access to Synergy’s corporate customers in the US that include world-renowned technology brands in the Bay Area and beyond. We will also be able to immediately fulfill demand from Synergy’s corporate customers when they require accommodation outside of the country. The US is a key market for Ascott 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.

The US is Ascott’s third largest source market for guests where Ascott has been a partner of Synergy to cross-sell units since 2013. Ascott’s global portfolio now comprises about 70,000 units. The company, according to Mr Lee, is confident of surpassing its target of 80,000 units well ahead of 2020, as it explores “more opportunities to grow through investments, management contracts, franchises and strategic alliances.”

Ascott has been on an acquisition spree to scale up its global presence. In May, Ascott’s real estate investment trust, 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 acquired Hotel Central Fifth Avenue New York, which will be rebranded to Citadines Fifth Avenue New York in 2018.