Ascott has secured contracts for two prime serviced residences in Astana, the capital of Kazakhstan city - and Aktau, a city in the oil rich western region by the Caspian Sea.
Ascott has been awarded the contracts by Tsesna Corporation, a well-established conglomerate in Kazakhstan with diverse businesses ranging from real estate and construction to banking. The two serviced residences to be built by Tsesna Corporation will be named Ascott Astana and Citadines Aktau.
In addition, Ascott has signed a Memorandum of Understanding with Tsesna Corporation to establish a framework for a strategic partnership to develop and manage serviced residences in Kazakhstan.
Mr Lim Chin Beng, Ascott's Chairman said: "Ascott's entry into Kazakhstan is part of our strategy to further strengthen the Group's global presence by venturing into emerging cities in Russia and the Commonwealth of Independent States. The strong levels of travel between Kazakhstan, China, Russia and Western Europe also present opportunities for Ascott to further develop our cross-border expansion strategy by leveraging on the Group's strong international brand reputation and established networks."
Mr Liew Mun Leong, Ascott's Deputy Chairman, and President and CEO of its parent company CapitaLand Group said: "Ascott strengthens its front-runner position in the global serviced residences business by being the first international serviced residence owner-operator in Kazakhstan. The country has strong oil and natural resource industries and has been attracting foreign investments and business travellers. Ascott's entry into Kazakhstan is yet another step for the CapitaLand Group to explore real estate development opportunities in fast growing oil rich countries."
Mr Serik Jaxibekov, Chairman of the Board of Directors, Tsesna Corporation said: "Ascott is an international serviced residence company with proven track record in managing a strong portfolio of serviced residences worldwide. By leveraging on Ascott's knowledge and expertise, we will promote new standards of living for business travellers in Kazakhstan. This is just a first joint project with Ascott and the CapitaLand Group. We look forward to other successful projects."
Mr Gerald Lee, Ascott's CEO for Europe said: "Ascott's partnership with an established company like Tsesna Corporation is a good start for us to enter an emerging market. Astana as the new capital of Kazakhstan has been fast developing as an attractive financial and investment hub, while Aktau is a major port and logistics hub in the oil rich region. We will work with Tsesna Corporation to expand our presence in Kazakhstan across the key cities, and will consider the option of taking equity stakes in some of the future projects."
Kazakhstan bordered by Russia, China, Kyrgyzstan, Uzbekistan, Turkmenistan and the Caspian Sea, is the ninth largest country in the world. It covers 2.7 million square kilometres, about the size of Western Europe. According to Economist Intelligence Unit, Kazakhstan's annual foreign direct investment is projected to be US$6.5 billion by 2010.
Ascott Astana is targetted for opening in the first half of 2009. When completed, it will be located in the heart of Astana where new iconic real estate projects are being developed. A 10-minute walk to the Presidential Palace and across the landmark Central Mosque, Ascott Astana will be within World Trade Centre, an integrated development which is being developed by Tsesna Corporation. The development will comprise residential, retail, business centre, and an exhibition and convention centre when it is completed in 2009.
Citadines Aktau is also targetted to open in the first half 2009. Aktau is in Western Kazakhstan, one of Kazakhstan's leading economic regions due to its rich oil and gas resources. Aktau is also home to the country's largest port facility, Aktau Port, which has been designated a Free Economic Zone.
Ascott Astana will have about 200 units while Citadines Aktau will have 120 units. The management contracts for these properties are not expected to have any material impact on the net tangible assets or earnings per share of The Ascott Group Limited for the current financial year.