
Tujia and Ascott are hoping to turn China’s empty apartments into cash cows
China’s unused apartments might soon become serviced apartments or vacation rentals after Singapore’s CapitaLand agreed to invest a total of $87 million with online apartment sharing platform Tujia.com
Tujia, which is frequently referred to as the AirBnB of China, received over $49 million in investment from CapitaLand’s serviced apartment division, Ascott, as part of a $300 million round of financing that valued the Chinese home rental site at just over $1 billion.
Ascott also agreed to form a $39 million joint venture with Tujia to establish a new brand of serviced apartments in China using newly sourced apartments, as well as existing units listed on Tujia’s platform.
The two-part deal represents both a bet on the growth of China’s travel industry, and an attempt to put convert some of the country’s unoccupied residential real estate into income-producing assets.
CapitaLand Joins $300M Investment Round

Ascott CEO Lee Chee Koon looks excited about the potential for working with Tujia
CapitaLand, which is part of Singapore’s government-owned Temasek Holdings, was joined in Tujia’s $300 million tranche of investment by venture capital fund All-Stars Investment (which led the round), as well as other investors. Some of Tujia’s existing partners, which include Chinese travel site Ctrip, also took the opportunity to further capitalise the fast-growing platform.
“China’s lengthening list of billion-dollar technology startups is an indication of investors’ confidence in the country’s booming internet sector, including O2O (both Offline-to-Online and Online-to-Offline) commerce,” commented Ascott CEO, Lee Chee Koon. Lee, who as part of the deal will become a director of the online startup, added that, “By investing in Tujia, a frontrunner in the online apartment sharing platform, Ascott is now well positioned to benefit from this growth.”
Putting China’s Unused Real Estate to Work
Tujia has already built up a platform of 310,00 properties across 255 cities in China, but CapitaLand and the other new investors are betting the startup has potential to get much bigger.
Part of what has helped Tujia to become a success so far, and could provide the catalyst for its future expansion, is China’s famous supply of unoccupied apartments.
Richard Ji of All-Stars Investment, pointed to the China’s oversupply of homes as one of the key advantages for Tujia. “There’s a deep pipeline of room supply,” Ji told the New York Times. “The local government tends to be the largest landlord and they want Tujia to help them absorb the vacancies.”
Earlier this year, Zhu Min, a deputy managing director of the IMF and a former Deputy Governor of China’s central bank, estimated that China currently has one billion square metres of unoccupied buildings. Another researcher, Professor Gan Li of the China Household Finance Survey and Research Centre said last year that China most likely has 49 million sold but vacant housing units.
Ascott Working With Tujia to Expand Its Portfolio
Ascott is eager to work with Tujia to help build up a nationwide network of serviced apartments, to add to its existing portfolio. The company, which operates under the Ascott, Citadines, and Somerset brands, now offers more than 40,000 apartments across 26 countries globally. The name of the serviced apartment brand to be offered through the new joint venture has not yet been announced.
In China the serviced apartment provider already offers nearly 13,000 apartments for rent in 72 properties across 23 cities in China, according to its website.
Ascott has set the goal of establishing 20,000 apartments in China by 2020, however, and Tujia could be a big help in reaching that target.
Tujia already works directly with real estate developers in China to help them rent out unsold inventory, and the company also provides management services to ensure the marketability of the apartments on offer.
Also as part of the deal, Ascott will begin marketing its existing serviced apartments on Tujia’s website and mobile app.
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