Four years after Singapore-based Ascott Ltd, a serviced residence operator, entered India, it has decided to part ways with its local partner in a bid to speed up expansion plans and have more control over its proposed projects. Dissolving its 40:60 joint venture deal with Chennai-based real estate firm Rattha Group, Ascott has decided to enter into new partnerships for future projects through majority or equal shareholdings at a project level.
Among emerging markets, “India is going to be our focus as it has lot of opportunities. But we also realized that being a minority shareholder, it’s difficult to be in control and speed up execution, and we would like to be in the driver’s seat,” said Ronald Tay, chief investment officer of Ascott who also oversees the company’s business in India. Ascott is a subsidiary of CapitaLand Ltd, one of Singapore’s largest realty firms.
Ascott had planned six projects with Rattha Group, with nearly 1,400 serviced apartments. It has bought out 100% stakes in four projects in Bangalore, Ahmedabad, Chennai and Hyderabad for an undisclosed sum.
In its maiden project with Rattha in Chennai, Somerset Greenways, Ascott has acquired a majority stake. Rattha will have control over the remaining projects. Once completed, Ascott’s projects would have drawn a total investment of $200 million, Tay said without disclosing the money spent to buy out the stakes.
Rattha Group has alliances for some of its other projects as well, including one with Prestige Estates Projects Pvt. Ltd for an integrated township in Chennai. Globally, Ascott is among the largest serviced residence operators with a presence in 20 countries and around 28,000 residential units. It operates under its brands Ascott, Somerset and Citadines.
“Besides the cities we are already present in, we will look to extend our footprint to other tier-I markets that include Mumbai, Pune and New Delhi,” said Tay.
Embarking on its new strategy, Ascott recently entered into a 50:50 joint venture with RMZ Corp. Holdings Pvt. Ltd to develop the 203-unit Citadines Galleria in north Bangalore.
