CapitaLand’s wholly owned serviced residence business unit, The Ascott Limited (Ascott), has continued its strong growth in the Middle East by inking contracts to manage its first two serviced residences in Al Khobar, one of the main metropolitan cities in Saudi Arabia’s oil-rich Eastern Province.
The 172-unit Ascott Corniche Al Khobar and 133-unit Somerset Downtown Al Khobar are slated to open in 2018 and 2019 respectively.
These latest contracts will increase Ascott’s presence in the Middle East to more than 2,300 apartment units across 16 properties in nine cities in Bahrain, Oman, Qatar, Saudi Arabia, Turkey and the United Arab Emirates (UAE).
Mr Lee Chee Koon, Ascott’s Chief Executive Officer, said: “Ascott started in the Middle East in 2006 with only 84 apartment units at a property in Dubai. Today, we have more than 2,300 units across 16 properties in the region.
“In addition to these two new properties in Al Khobar, Ascott will open seven more properties over the next three years, in Dubai in UAE, Istanbul in Turkey, Jeddah and Riyadh in Saudi Arabia and Muscat and Sohar in Oman.
“As we continue to see strong demand fuelled by the growth in domestic and regional business as well as leisure travellers, Ascott targets to more than double up our scale to achieve 5,000 serviced residence units in the Middle East by 2020.”
Several countries in the Middle East are taking steps to boost their economies. Saudi Arabia, the largest economy in the Middle East, has opened its stock market to foreign investors. In recent years, it has been diversifying its economy by investing in telecommunications, petrochemicals, natural gas and power generation sectors.
As more multinational corporations from these sectors expand in Saudi Arabia, it will generate demand for Ascott’s serviced residences. Major infrastructure projects are also underway in Qatar and the UAE for the FIFA World Cup 2022 and the Dubai World Expo 2020 respectively.
Mr Lee said: “Recognising Ascott’s strong capabilities in operating award-winning serviced residences globally for over 30 years, many partners in the region have been approaching us to manage their properties and we will continue to expand through management contracts. In the last seven months, Ascott has opened four properties in the Middle East – its first property in Oman, Somerset Panorama Muscat and another three in Jeddah, Saudi Arabia.
“In addition, we have formed a US$600 million fund with Qatar Investment Authority to invest in serviced residences and rental housing properties, with an initial focus on Asia Pacific and Europe. We have acquired two properties since the set up of the fund in July 2015. With these growth strategies, we are well on track to achieve our global target of 80,000 units by 2020.”
Mr Tony Soh, Ascott’s Chief Corporate Officer who oversees the company’s business in the Middle East, said: “Ascott is one of the first international serviced residence operators to set foot on Al Khobar with our world-class Ascott and Somerset brand of serviced residences.
“We expect Ascott Corniche Al Khobar and Somerset Downtown Al Khobar to perform well given their prime locations. Spacious apartments, quality furnishings and amenities, coupled with Ascott’s award-winning hospitality will ensure the properties set a new benchmark for short- and long-term accommodation in this vibrant region of Saudi Arabia.”
Ascott recently opened Somerset Panorama Muscat and Citadines Al Salamah Jeddah, the first Citadines-branded property in the region, following the successful opening of Ascott Sari and Ascott Tahlia Jeddah last year.
Ascott Rafal Olaya Riyadh is due to open later in 2016. Citadines Culture Village Dubai, Citadines Al Ghubrah Muscat and Somerset Maslak Istanbul will open in 2017. Four more properties are slated to open in 2018 – Ascott Culture Village Dubai, Ascott Corniche Al Khobar, Somerset Corniche Jeddah and Sohar Garden Residences in Oman. Somerset Downtown Al Khobar will open in 2019.