Ascott adds first Citadines to its portfolio of serviced residences in Japan, the Ascott Group has signed a Memorandum Of Understanding, (MOU) with Mitsubishi Estate Co Ltd (MEC) to acquire a prime site in Shinjuku, one of the busiest business, shopping and entertainment districts in central Tokyo. 

The acquisition of the site at 28-14 Shinjuku 1-chome, which has an existing office building, will be made with Ascott holding a 40% equity stake in the joint venture company to be set up as part of the MOU, while MEC, a long-standing partner of Ascott, will hold the remaining 60% stake. 

The existing office building will be demolished and a 160-unit serviced residence to be named Citadines Tokyo Shinjuku will be built on the site.  This will be Ascott's first Citadines-branded serviced residence in Japan.  Ascott will invest S$40 million, or 40%, of the total project cost of S$102.2 million, while MEC will invest the remaining balance.  Ascott will manage Citadines Tokyo Shinjuku for five years with an option to renew the contract for another five years.

Citadines Tokyo Shinjuku complements Somerset Azabu East and Somerset Roppongi - two existing serviced residences in Tokyo which are owned by Ascott Residence Trust (ART), an associated company of Ascott.  With these strategically located properties, Ascott will be able to cater to a wider segment of travellers with varying needs.

Mr Cameron Ong, Ascott's Managing Director and CEO said: "Japan's improving economy, increasing foreign direct investments and buoyant property market present strong growth potential for the serviced residence industry.  The current supply of 3,000 serviced residence units in Tokyo is not enough to cater to the growing number of expatriates and travellers to the city.  According to the Tokyo Metropolitan Government, the number of registered foreigners is expected to grow at 5% per annum for the next five years." 

"The acquisition of the site for Citadines Tokyo Shinjuku is an extension of Ascott's strategy of incubating quality assets for potential investment; with the view to eventually inject yield-accretive properties into ART.  Earlier, in September 2006, Ascott divested its 40% stake in Somerset Roppongi to ART, and on 24 January 2006, MEC divested its stakes in Somerset Roppongi and Somerset Azabu East to ART.   These initiatives demonstrate The Ascott Group's ability to provide not only a full range of services to our partners but also to have a vehicle for acquisition of assets which have achieved stable yields," added Mr Ong.

Citadines Tokyo Shinjuku
Citadines Tokyo Shinjuku enjoys a prime location close to the Marunouchi and Toei Shinjuku trains stations. Within the vicinity of the property are office towers, various dining outlets including 24-hour restaurants, supermarkets, shopping malls, the Shinjuku Hospital and Shinjuku Gyoen National Garden.  The serviced residence is targeted to be opened in the first half of 2009 with studio and one-bedroom units.

With the addition of Citadines Tokyo Shinjuku, Ascott's portfolio in Japan will stand at 303 units in three properties.