Singapore’s CapitaLand is making its fourth US acquisition in less than six months, buying a Silicon Valley hotel through its serviced residence unit The Ascott Limited in a S$81.5 million ($60.1 million) project.
The investment amount includes Ascott’s planned refurbishment of The Domain Hotel, a 136-unit property in Sunnyvale, California. The Singapore group will undertake the project in phases before rebranding the property as Citadines Cupertino Sunnyvale in the fourth quarter of 2018, according to a statement by the company.
The deal in the global high tech hub marks the second US inroad by Citadines, the fastest-growing serviced apartment brand in The Ascott Limited’s portfolio, after Ascott bought a Manhattan hotel that will be converted to a Citadines property this past May.
The seller is believed to be Platinum Equity, a Los Angeles-based private equity firm that bought the asset in December 2014. Operated by US hotel management firm Crescent Hotels & Resorts, The Domain Hotel will stay open during the refurbishment process.
Ascott Lands in Silicon Valley
The Domain Hotel is located along El Camino Real, Sunnyvale’s main thoroughfare, a short drive away from the headquarters of such tech titans as Apple, Google, and Yahoo. Catering to both business and leisure travellers in the epicentre of America’s startup scene, the hotel is close to retail, dining and entertainment options and top schools including Stanford University.
“We are acquiring Ascott’s first property in Silicon Valley which will allow us to invest in one of the most desirable property markets in the US,” said Ascott CEO Lee Chee Koon in the statement. “Silicon Valley has a high growth economy and is home to some of the world’s biggest and leading technology companies and multinational corporations, generating significant demand for accommodation.”
The executive also noted that the deal would strengthen Ascott’s ability to tap directly into corporate clients in the US, building on the company’s purchase of an 80 percent stake in San Ramon, California-based Synergy Global Housing.
Announced in July, Ascott’s acquisition of an 80 percent stake in the US accommodation provider tripled Ascott’s portfolio in the US from 1,000 to 3,000 units, bringing the Singaporean company’s offerings directly to Bay Area tech firms and other corporate customers in the US.
“By stepping up our Citadines presence in the US, we will increase its reach to American travellers, our third largest source market, and cross sell to our properties outside the US,” Lee added.
CapitaLand’s Serviced Residence Unit Ramps Up in the US
The Silicon Valley acquisition brings the Citadines moniker to the US West Coast, after Ascott picked up the Hotel Central Fifth Avenue New York for nearly $50 million this past May, with plans to rebrand the prime Manhattan property as Citadines Fifth Avenue New York in 2018.
In the same month, Ascott’s REIT, Ascott Residence Trust, purchased the DoubleTree by Hilton Hotel New York – Times Square South for $106 million. The deal marked the Singaporean REIT’s third Manhattan acquisition, adding to its purchases of the Sheraton Tribeca New York Hotel (for $158 million in March 2016) and the Element New York Times Square West hotel (for $163.5 million in July 2015).
The Ascott Limited has over 43,000 serviced residence units in operation, plus 26,000 units under development, across more than 120 cities worldwide. In addition to Citadines, the Singaporean firm operates a portfolio of brands that includes Ascott, Somerset, Quest, The Crest Collection, and the co-living platform lyf. The company is a subsidiary of CapitaLand Group, the largest developer in Southeast Asia.