CapitaLand, one of Asia’s largest real estate firms, will spend about $300 million over the next three years to grow its hospitality business in India.
The Singapore-based realty major’s hospitality arm, The Ascott Ltd, is developing six properties in India, with 1,300 apartment units. These comprise two properties each in Bangalore and Chennai, and one each in Ahmedabad and Hyderabad.
Ascott, the world’s largest owner-operator of serviced residences, has announced its first property in India had been secured through a lease agreement and the 96-unit serviced residence in Bangalore would begin operations from August 1. It did not specify the duration of the lease.
“India is a key market for Ascott, as it has significant demand for serviced residences arising from the fast growing economy,” Lim Ming Yan, Chief Executive Officer, said in a statement.
“The six properties will cost $300 million when fully developed over the next three years. Besides investment, we are also seeking opportunities for management contracts or lease agreements, such as the Citadines Richmond Bangalore, to grow our network in the country,” he said.
Ascott, which has about 22,000 operating serviced residence units across Asia Pacific, Europe and the Gulf, is developing 6,000 more units across 14 different cities. It operates three brands — Ascott, Citadines and Somerset. The firm will bring Citadines and Somerset to India as part of its expansion plan. The premium Ascott brand may be introduced in Tier-I cities later.
“Our strategy for India is to capitalise on opportunities in the gateway cities and in high-growth emerging markets, where there is strong demand for international-class serviced residences. Besides Bangalore, Ahmedabad, Chennai and Hyderabad, we will also look at extending our footprint to other cities, including Mumbai, Pune and New Delhi,” Ronald Tay, Chief Investment Officer, said.
The firm is especially bullish on Bangalore, where it intends to have three properties with about 500 apartment units. Apart from “the lack of international quality serviced residences in Bangalore,” Tay said, “given the strength of the information technology sector in India, it is timely for us to deepen our presence in Bangalore, touted as the Silicon Valley of India.”
