Ascott expands Oakwood portfolio by over 20% following acquisition in 2H2022

By Samantha Chiew

/ The Edge Singapore |

January 19, 2024 3:30 PM SGT

Rooms at Oakwood aim to cater to both long-term and short-term stay guests. (Photo: The Ascott Limited)

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The Ascott, the lodging arm of CapitaLand Investment, announced that it has grown its Oakwood portfolio by by over 20% since the group acquired Oakwood Worldwide in 2H2022.

To recap, Ascott acquired Oakwood Worldwide from Mapletree Investments. Although the group did not disclose the acquisition amount, it is estimated that the consideration would have been within the range of $40 million to $50 million.

At the time of the announcement in July 4, 2022, 8,500 out of 15,000 keys were operational and the fee-related earnings (FRE) per 10,000 operational and stabilised keys is around $20 million. The Oakwood brand has been kept, but Ascott has implemented a brand refresh across all the Oakwood properties.

Today, Ascott has expanded Oakwood’s presence to 48 cities, entering new destinations including Busan in South Korea, Batam and Bali in Indonesia, Penang and Kota Kinabalu in Malaysia, Visakhapatnam, Chennai and Navi Mumbai in India, as well as Ha Long in Vietnam.

With almost 18,000 units to date, the Oakwood portfolio has grown by more than 20% post-acquisition, making it one of the fastest growing global brands in the Ascott portfolio with over 20 new signings since the acquisition.

In its media release, Ascott said that the successful integration of the Oakwood brand into its ecosystem helped grow revenue and helped to improve operational efficiencies with cost synergies.

Recent new wins, previously managed by other operators, include Oakwood Hotel & Apartments Taman Mini Jakarta and Oakwood Makati Avenue.

Kevin Goh, CEO for Ascott and CLI Lodging says: "The uplift in revenue and improved margins are testament of Ascott’s ability to leverage pricing power and meet market demand, contributing to an overall enhanced financial performance of the Oakwood portfolio post-acquisition."

Goh adds that with more operationally ready properties coming onstream at a faster pace, Ascott is seeing immediate contribution of the Oakwood portfolio to its recurring fee income, which is in line with the group's aim to double fee earnings to more than $500 million by 2028.

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Already, Ascott in 2023 has launched about 70 properties globally, which translates to about 13,500 units, across all its brands.

“Ascott will continue to pursue transformative deals which can accelerate our expansion and provide us with immediate access to new markets, diverse customer bases, and valuable synergies. The strategic benefits of inorganic expansion extend beyond incremental growth," says Goh, adding that inorganic expansion has supported the group's efforts to unlock economies of scale, streamline operations, and enhance overall competitiveness.

Tan Bee Leng, Ascott’s managing director for brand & marketing says: "Against the backdrop of the surge in bleisure travel, a portmanteau of business and leisure, we have harnessed Oakwood’s deep rooted understanding of corporate travel, to kickstart a brand refresh that aligns with the needs of business travellers today."

The refreshed Oakwood brand aims to provide thoughtful in-property amenities and productivity tools to attract the growing market of bleisure (business and leisure) travellers, or business travellers who view work trips as opportunities to extend their stays for leisure purposes.

Some of Oakwood brand signatures include the Oakroom, a lobby space that receives guests with a sense of arriving home to familiarity; various dining options within the properties; food-related events and activities; as well as professional and warm ambassadors known as Oakwood GEM (an acronym for genuine, empowered and meticulous).

The Oakwood brand refresh comes on the back of the refreshed Citadines, Somerset, and Ascott brands, which were unveiled over the last two years. It is part of Ascott’s Brand-360 strategy, a groupwide exercise to strengthen its brand portfolio through sharpened brand stories and the introduction of signature experiences and programmes unique to each brand.

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Shares in CLI last traded at $2.96 on Jan 17.

This article first appeared on The Edge Singapore.

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