The Ascott Group has signed a sale and purchase agreement with Gladedale Capital, which specialises in building high-quality commercial developments in the United Kingdom.

Gladedale will construct and deliver to Ascott a seven-storey building in its bare shell status which Ascott will further furnish into a 107-unit serviced residence in Edinburgh. Ascott will invest a total of ï¿¡24.7 million (S$76.1 million) including the purchase cost of ï¿¡21.4 million (S$66 million) in the property, its first acquisition in Scotland.

The serviced residence to be named Citadines Edinburgh Quartermile is located in the heart of Edinburgh's city centre and targeted for opening in mid-2009. The property will be within a premier business, residential and retail zone known as Quartermile, a major urban development project expected to be completed by 2012.

Mr Lim Chin Beng, Ascott's Chairman said: "Ascott has been seeking suitable locations in Europe's key gateway cities to enhance its presence and increase its present European portfolio of 5,000 units to 7,500 units by 2010. Ascott currently operates 44 properties in Europe; with Citadines Edinburgh Quartermile, it will reap benefits in brand visibility. Through its agreement with Gladedale, Ascott is also the first international serviced residence owner-operator to enter Edinburgh."

Mr Liew Mun Leong, Ascott's Deputy Chairman, and President and CEO of its parent company CapitaLand Group, said: "Ascott currently operates seven properties in London; the Group is expanding beyond London into Edinburgh as it holds huge potential for Ascott. It is the second most important financial city, and has the second highest gross domestic product in the United Kingdom after London. Beyond Edinburgh and London, Ascott intends to enhance its presence in other cities in the United Kingdom as well. This is consistent with our strategy to establish a key presence in gateway cities globally."

Mr Gerald Lee, Ascott's CEO for Europe said: "Edinburgh is recognised as a key growth engine for Scotland's economy, and is also one of the top 10 international conference and convention cities in the world. The capital enjoys strong tourism arrivals of more than 10 million visitors annually. There is therefore strong demand from both the leisure and business segments for accommodation in Edinburgh. Occupancy rates hit 80% last year, and there is a shortage of serviced residences in the city.

Overall, with strong performance and double-digit growth in revenue per available unit from our properties in the United Kingdom, we are confident that we will see continued growth from our European operations. We also recently acquired a property in Munich and will continue to seek suitable properties in other key cities in Europe as part of our expansion there."

Jim McIntyre, Managing Director of Gladedale Capital, said: "We are delighted that an internationally-recognised operator such as Ascott is coming to Quartermile. This is a groundbreaking deal in a number of ways. The apart'hotel model is a new concept for Edinburgh and we believe it will be a popular one with visitors. In addition, the presence of an international player like Ascott will help to boost Scotland's hospitality and real estate sectors."

Citadines Edinburgh Quartermile will be within the Quartermile development, a joint venture project by Bank of Scotland and Gladedale. The project consists of 19 acres of Edinburgh's city centre which has been undergoing urban re-development into one of Europe's premier business, residential and retail zones. When completed by 2012, the Quartermile development will include over 300,000 square feet of premium office space, over 55,000 square feet of retail and leisure space, over 900 new and converted modern apartments, and seven acres of landscaped gardens and public space.

Quartermile is a flagship project designed by Foster and Partners, a leading firm of architects in the United Kingdom. The practice is strongly associated with its founder, Sir Norman Foster, and has constructed many high-profile glass and steel, high-tech buildings around the world, including Singapore's own Expo Mass Rapid Transit Station located in the east.