Published on Friday, 16 August 2013 00:00
Written by IRMA ISIP
Malaya
Business News Online - Philippine Business News | Online News Philippines
The company
manages the 306-unit Ascott Makati,(photo) the 151-unit Somerset Millennium
Makati, and the 147-unit Somerset Olympia Makati.
Ascott
Limited is planning to manage two more serviced apartments to achieve its goal
of 10 properties in the Philippines by 2015.
Arthur
Gindap, Ascott’s regional general manager for the Philippines and Thailand,
said in an interview the company is looking for more properties in Metro Manila
and in the provinces where it can operate either of its three brands of serviced apartments,
Ascott, Somerset or Citadines.
The company
now manages four properties but only three are operating: the 306-unit Ascott
Makati, the 151-unit Somerset Millennium Makati, and the 147-unit Somerset
Olympia Makati. The fourth is Somerset Salcedo.
Gindap said
Ascott Ltd. is poised to open four more: Ascott Bonifacio Global City Manila
(220 rooms) and Citadines Salcedo Makati (215 rooms) in 2014, Citadines
Millennium Ortigas (210 rooms in 2015, and Somerset Alabang Manila (150
rooms) in 2017.
In 2012,
Ascott’s three operating properties recorded a total of P1.24 billion worth of
annual revenues, as well as P758.8 million in profit.
“These
figures drive us towards maintaining a bullish stand on the market as we push
for more expansions within and outside of Metro Manila. We are bullish that the
market for extended stay travelers would continue to grow,” Gindap said.
He said
Ascott, being not a first-mover, is closely watching ongoing developments
particularly in the central business districts in Quezon City, Mall of Asia
area, Roxas Boulevard, Cebu and Davao for future property management of either
of its three brands.
“We are
closely watching the secondary cities,” Gindap said.
While the
Ascott The Residence brand is very exclusive, catering to chief executive
officers, Somerset Serviced Residence is more balanced for larger families
while Citadines Apart-Hotel caters to single travelers.
Gindap said
Ascott Ltd. is bullish of the Philippines that it is opening up two Ascott
developments.
Ascott
normally allots just one per country. It is also going to open the first
Citadines, the one in Salcedo.
Even its
Ascott Makati, the former Oakwood Premier, is undergoing renovation by
splitting some of the two-bedroom units into separate studios where demand is
greater.
“Currently,
we have an inventory of over 600 units, making us the largest international
serviced residence operator in the country. With our four upcoming properties,
we will more than double this figure in the next four years.”
He said the
size of the foreign direct investments in a country is directly related to the
occupancy rate of a serviced apartment.
In its three
operating properties, occupancy rate is about mid to high 80s. Guests stay an
average of six months but some book for as long as one year, particularly for
those staying in the Somerset properties, and as short as one to three months
for Ascott Makati guests.
“We cannot
compete with condominiums and residences in Dasmarinas or Forbes Park in terms
of price,” said Gindap.
Ascott Makati
was the rebranded Oakwood, site of the infamous mutiny, and the building was
acquired by Ascott Ltd for P2.7 billion in 2007.
The land is
covered by a long-term lease with Ayala Land.
The value of
that property now is considerably high, said Gindap, but declined to elaborate.
Except for
Ascott Makati, the three other properties are now under Ascott Ltd.’s real
estate trust investment (REIT) unit, Ascott Properties Trust.
Gindap said
owners/developers of upcoming properties have the option to sell the assets to
Ascott Ltd. after “hitting a certain yield” after three to five years.
“Ascott does
not develop properties but we have management agreements with these properties.
We prefer greenfield developments where we can custom-build the projects based
on Ascott specifications. We are open to brownfields, such as abandoned
buildings,” Gindap said.
According to
Gindap, industry-wide, serviced apartments are most profitable generating as
much as 60 percent in operating profit compared to 35 to 40 percent in hotels.
Luxury hotels have even lower operating profits of as low as 25 percent.
Hotels’ operating
expenses are high due to the food and beverage operations. Serviced apartments
have very limited F&B since they derive up to 95 percent of their revenues
from rooms.
The Ascott
brand caters primarily to guests staying for one week to one year or even
longer, ensuring a more stable occupancy compared to hotels. These are business executives on extended
business trip, project assignment or overseas posting who require the comfort
and convenience of hotels and seek the space and homely comforts of a private
residence.
“At our
serviced residences, guests can choose to stay in a studio or one- to
three-bedroom apartments. They can enjoy
the space and privacy of a well-appointed apartment that features a
well-equipped kitchen and separate living and dining area,” Gindap said.
“In 2014, we
will be opening our first Citadines-branded property in the Philippines. With all our three serviced residence brands
present in the country, we are better poised to cater to guests’ unique stay
preferences and requirements,” Gindap said
With its
expansion and its own brand of hospitality, Ascott in the Philippines is
fuelling growth and recognition for serviced residence category in the local
hospitality landscape.
The Ascott
Ltd. is a Singapore company that has grown to be the world’s largest
international serviced residence owner-operator. It has more than 22,000
operating serviced residence units in key cities of Asia Pacific, Europe and
the Gulf region, as well as over 8,000 units which are under development, making
a total of more than 31,000 units in over 200 properties.
Its portfolio
spans over 70 cities across more than 20 countries, 14 of which are new cities
in Ascott’s portfolio where its serviced residences are being developed.
Ascott, a
wholly-owned subsidiary of CapitaLand Limited, pioneered Asia Pacific’s first
international-class serviced residence with the opening of The Ascott Singapore
in 1984.
CapitaLand is
one of Asia’s largest real estate companies.
Headquartered
and listed in Singapore, the company’s businesses in real estate and real
estate fund management are focused on its core markets of Singapore and China.
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