Ascott is investing AU$136M for the development of a 398-unit serviced residence in Melbourne's Central Business District. The investment amount includes land and building costs.

The property, which will be named Citadines Melbourne on Bourke, will be Ascott's first Citadines in Australia and is currently the largest Citadines-branded serviced residence in the Group's portfolio.

Ms Jennie Chua, Ascott's President & CEO, said: "Australia is an important market for Ascott's global expansion strategy. We currently have six Somerset serviced residences in key cities of Australia including Hobart, Melbourne, and Sydney. To further strengthen our foothold in the country, we will continue to seek out new opportunities in other key cities including Adelaide, Brisbane and Perth."

Ms Chua added: "Ascott's investment in Melbourne is timely; according to Deloitte's survey, it is ranked number two among cities in the world with the highest occupancy rates. With strong demand of above 80%, Melbourne's accommodation market continues to present growth opportunities for Ascott."

Currently, Ascott has three Somerset serviced residences in Melbourne which are running at an average occupancy rate of 85%. Citadines is catered to travellers who prefer flexibility over the services they need. With Citadines, Ascott will be able to capture a broader segment of the market including leisure travellers who visit Melbourne for the arts and cultural festivals, and sports events.

Located at the heart of the CBD at 131-135 Bourke Street, Citadines Melbourne on Bourke is within walking distance to public transport including trains, trams and buses, and is well-served by amenities like restaurants, cafes, cinemas, high-end shopping malls as well as parks and gardens. The property is also at the midpoint of Melbourne's renowned theatre district and close to major office towers.

Citadines Melbourne on Bourke is expected to be completed in the second half of 2010. When completed, Ascott's portfolio in Australia will increase from the current 435 units in six properties, to 833 units in seven properties. The other six properties in Australia include two in Hobart (Somerset on the Pier and Somerset on Salamanca), three in Melbourne (Somerset Gordon Heights, Somerset Gordon Place and Somerset on Elizabeth), and one in Sydney (Somerset Darling Harbour).