Singapore: Ascott acquires 80% in US-based Synergy Global Housing for $33.7m

Mosso in San Francisco. Credit: Ascott

CapitaLand’s wholly-owned serviced residence business unit, The Ascott Limited (Ascott), is acquiring 80 per cent interest in Synergy Global Housing (Synergy), a major accommodation provider in the US, for $33.7 million.

The acquisition will expand Ascott’s footprint in the US.  It will also triple Ascott’s portfolio from over 1,000 units to about 3,000 units in the US.

The deal is follows an investment earlier this month in Quest Apartment Hotels.

Growth of Ascott units. Credit: Ascott

Lee Chee Koon, Ascott’s CEO, said, “With the acquisition of Synergy as well as our earlier investment in Quest, Ascott is gearing up to transform our business to become an even more active and dominant player in the hospitality ecosystem.”

“As we move up the value chain to acquire strong operating platforms globally, we are getting closer to our customers, understanding their needs better and thereby improving our service and product offerings to them. The synergies to be realised with these majority-stake acquisitions will propel Ascott’s growth at an unprecedented pace.”

According to Lee, the acquisition of a majority stake in Synergy will further increase the scale of its business in the US market and strengthen Ascott’s market position.

Earlier this year, Ascott’s real estate investment trust (REIT), Ascott Residence Trust, acquired the 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. Ascott also acquired Hotel Central Fifth Avenue New York, which will be rebranded to Citadines Fifth Avenue New York in 2018.

Ascott acquisition map. Credit: Ascott

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Lee explains: “With Synergy, it will expand our global cross-selling and distribution network as well as enlarge our talent pool. Ascott will also get an uplift by over 2,000 units located predominantly in the U.S., and increase our global portfolio to close to 70,000 units. We are confident of surpassing our target of 80,000 units well ahead of 2020, as we look at more opportunities to grow through investments, management contracts, franchises and strategic alliances.”

With the US being Ascott’s third largest source market for guests, the acquisition will grant it direct access to Synergy’s corporate customers in the US , which will grant this client base more accommodation options in the US and Internationally.

The acquisition also lays the ground for further expansion into key US cities such like New York, Boston, Los Angeles, San Francisco and Francisco and Washington DC.

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 partners and property owners to rent to corporate clients. In particular, this investment will give Ascott an immediate presence and access to corporations based in Silicon Valley.

The US corporate housing industry has seen revenue grow at a CAGR of 6.5 per cent from 2012 to 2016. Supply for corporate housing units experienced the fourth successive year of growth in 2016, increasing 4.7 per cent. This availability of units allow corporate housing providers to have the flexibility to adjust inventory in response to customers demand and obtain inventory at competitive rent levels.

In particular, this investment will give Ascott an immediate presence and access to corporations based in Silicon Valley, which includes high- tech powerhouses boasting achievements and influence that extend well beyond the San Francisco Bay Area.

Synergy acts as an accommodation provider for many Fortune 500 companies and major Silicon Valley technology firms, with corporate clients coming from industries such as relocation, healthcare, manufacturing, entertainment, social networking and technology.

Synergies of Ascott, Quest Apartments and Synergy Global. Credit: Ascott

Jack Jensky, Co-founder of Synergy Global Housing, said, “Ascott’s acquisition gives Synergy a competitive advantage by growing our global footprint and providing our customers more high-quality international serviced accommodation options to our U.S.-based clients.”

2017 has seen Ascott engage in an array of acquisitions, with the firm becoming the largest serviced residence provider in Australasia through the acquisition of a majority stake in Quest Apartment Hotels.

Also Read: 

SG Realty: Sinarmas Land acquires London property; Ascott Residence divests China assets

Singapore: Ascott REIT buys hotel chain DoubleTree by Hilton for $106m

Singapore: The Ascott acquires New York property, plans to invest $50m

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.