QUEST & ASCOTT STRIKE $500M DEAL

A HALF-A-BILLION dollar multi-faceted agreement struck between Quest Serviced Apartments and Singapore’s The Ascott Limited has paved the way for Victoriabased Quest to bed down its local operation and explore opportunities beyond current operations in Australia, New Zealand and Fiji. Some five months in the works, the strategic alliance was signed in late October and comes after Quest engaged Goldman Sachs late last year to identify potential business partners “to support our growth aspirations and accelerate our growth from a property perspective”, Quest Serviced Apartments CEO Zed Sanjana said. The five-year deal will see The Ascott Limited invest heavily in the expansion of Quest Serviced Apartments into previously underserved markets domestically, kicking off the partnership by acquiring three established properties in NSW at Mascot, Sydney Olympic Pack and Campbelltown. The Ascott Limited operates 200 properties in 86 locations across 24 countries under three brands – Ascott The Residence, Somerset Serviced Residence and Citadines Apart’hotel. Locally, the Singaporean company operates three Somerset and two Citadines properties in Melbourne, Hobart and Perth. Sunjana said The Ascott had an appetite to expand its presence from a property ownership perspective, adding that in Quest, the company had seen an “opportunity to be able to deepen the business in Australia”. He also stressed that Quest’s roots were still firmly seated in Victoria – where close to 60 of the group’s 114 properties are located – and flagged further expansion plans within Australia. “We’ve always been a business that services customer demand that is out there, and that demand exists in New South Wales, Queensland and Western Australia where we are relatively under-represented,” he said. “We certainly think we’ve got the opportunity to expand our network to over 200 in Australia which will take our total portfolio in Australia and New Zealand to about 250.” Sanjana said the agreement was “transformational” for Quest, noting that the partnership would put the company on the map and provide an opportunity to “finish the story in Australia, which is not quite there yet”. “This probably allows us to finish that story a bit quicker and accelerate our growth,” he said. Quest has 16 properties under development in Australia that are earmarked to open in the next 18-24 months. However, the new investment from The Ascott goes beyond current developments, extending to “true growth”. “It certainly allows us to bring forward some opportunities [such as] Sydney where we don’t have a lot of representation. This funding will help us change that pretty quickly,” the CEO of 18-months said. Speaking with Sanjana said both parties would collaborate on marketing and sales efforts, and synergise customer initiatives across the four brands. But de-branding any of Quest’s properties in Australia to The Ascott, Somerset or Citadines was unlikely, he added. “It would probably go the other way, if at all, but at the moment it is not really a priority,” he said. Through the partnership, The Ascott will develop a franchising presence and tap into Quest’s 25-year track record and “know-how” of the franchising model, while The Ascott will provide Quest with a platform to expand further offshore once its Australia portfolio is complete in the next “five to 10 years”, according to Sanjana. As to what new foreign markets Quest Serviced Apartments would expand first, southeast Asia is likely to be a front runner.