SINGAPORE (May 8): CapitaLand’s serviced residence business unit, The Ascott Limited, is stepping up the expansion of its Citadines brand in China

Ascott will accomplish this through a joint venture with hotel operator Huazhu Hotels Group and its apartment rental subsidiary, CJIA Apartments Group.

The joint venture will focus on growing Citadines in the first-tier Chinese cities of Shanghai, Beijing and Shenzhen for the initial years.

The JV has secured its first property in the Pudong district of Shanghai, which will come under the Citadines brand and enjoys easy access to the city’s financial district.

With an initial registered capital of $21 million, Ascott, Huazhu and CJIA will hold 50%, 10% and 40% respective stakes in the JV partnership.

Listed on Nasdaq since 2010, Huazhu has a market cap of US$10.4 billion ($13.9 billion) and the third largest market share in China’s midscale hotel segment with a total portfolio of over 380,000 hotel rooms.

CJIA, in a short span of over two years, has expanded to collaborate with over 100 property management firms with 10,000 apartments.

Kevin Goh, Ascott’s CEO, says: “Our partnership with Huazhu and CJIA marks Ascott’s most significant and game-changing move in the asset-light “manachise” business to date. Huazhu is one of China’s biggest hospitality players with significant local capabilities. CJIA has scaled up rapidly in the apartment rental space with more than 90% of its revenue from long-term rentals, which complements Ascott’s strong position in the long-stay business. Ascott will be able to tap on Huazhu and CJIA’s vast expertise in operating properties through manachise, and their over 100 million-member database of domestic corporate and leisure travellers.”

The joint venture with Huazhu and CJIA comes hot on the heels of Ascott’s recent partnership with specialty township developer Riverside Group to launch serviced residences in Zhejiang, Chongqing and future riverside themed towns in other key Chinese cities. Ascott is also in partnerships with new economy leaders such as Tujia, China’s largest online apartment sharing platform, and Alibaba’s online travel service platform Fliggy.

Ascott has more than 110 properties with over 20,000 units across more than 30 cities in China. Of these, 30 are Citadines-branded properties with close to 5,000 units in 19 cities.

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