Singapore’s Mapletree Investments has purchased Los Angeles-based serviced apartment provider Oakwood Worldwide for an undisclosed sum.
The sylvan-themed deal gives the Temasek Holdings-backed firm control over a network of corporate housing and serviced apartments with properties in more than 95 countries, according to a statement from the company.
The buyout follows three years after Mapletree, which started life as a developer of facilities for Singapore’s navy, established a joint venture with Oakwood. The Singapore-listed developer and investor has been branching out from its industrial roots in recent years with global acquisitions in student housing, commercial buildings and other assets.
Buyout Follows 2014 JV Deal
“This acquisition is strategic and commercially significant to Mapletree. Our full ownership of Oakwood will allow us to enhance efficiencies and the growth momentum of our corporate housing and serviced apartment business,” said Mapletree Group Chief Executive Officer Hiew Yoon Khong.
The purchase gives Mapletree control of a portfolio that includes more than 50 branded properties across North America, Europe and Asia Pacific, with the company offering solutions under the Oakwood, ExecuStay and Insurance Housing Solutions names.
Under the terms of the agreement between the two firms, Mapletree takes over all of Oakwood’s operations globally, with Oakwood Founder and Chairman Howard Ruby becoming chairman emeritus of the firm. Former Oakwood vice president Christopher Ahearn was appointed as the company’s new CEO.
In 2014 Mapletree announced a $4 billion joint venture with Oakwood, which gave the Singaporean firm a 49 percent stake in Oakwood Worldwide’s serviced apartment business in Asia, along with an option to increase its stake. The deal also put the Oakwood brand on nine Mapletree properties operated by Oakwood in the US and Australia.
Mapletree Plans Big Things in Serviced Apartments
For Mapletree, the acquisition is part of a roadmap to playing a bigger role in the serviced residence market.
“Furthermore, Mapletree intends to step up the acquisition and development of corporate housing and serviced apartment assets that will add to our earnings streams and expand housing options available to Oakwood’s clients and guests,” said Mapletree’s Hiew. “We will be looking at markets across the US, Europe and Asia Pacific, which are also regions where Oakwood is a well-regarded brand.”
Mapletree is currently developing three serviced apartment properties in Japan and Vietnam as well as one other asset currently under development in the US, which will be managed by Oakwood Worldwide upon completion.
The acquisition follows a number of niche plays by Mapletree in the last year. During March of 2016 the company acquired a portfolio of 25 buildings and more than 5,500 beds of student housing from Mansion Student Accommodation Fund’s Ardent Portfolio for £417 million ($594 million), and then in November it completed the acquisition of another 6,000 beds of student accommodation in the US.
Sibling Apartment Rivalry
For Mapletree’s parent firm, Temasek Holdings, the Oakwood acquisition provides a second set of serviced apartments to complement the Ascott Group held by subsidiary CapitaLand. Ascott, which historically focused on Asia Pacific, now has more than 30,000 serviced residence units operating across the Americas, Asia Pacific, Europe and the Middle East.
Both Mapletree and CapitaLand are controlled by Temasek, which operates as a national wealth fund of the government of Singapore.