CAPITALAND'S service apartment unit The Ascott Limited plans to 'redeploy' $1 billion of capital into new investments this year.
Ascott chief executive Lim Ming Yan yesterday said that the group is looking to expand its market leadership position in Asia. In addition, Ascott also wants to grow in Europe, where there are distressed assets up for sale.
The firm has cash on hand after selling 28 properties to its listed unit Ascott Residence Trust (ART) in August last year for $969.6 million.
'2011 will be an exciting year for us. We are looking at recycling the cash we got from injecting properties into ART last year into China, India, Singapore and Europe,' Mr Lim said. He was speaking to reporters to give an update on Ascott's business plans for 2011.
Ascott has a long-term target of growing its global portfolio to 40,000 apartments by 2015, which the firm says it is on track to meeting. Right now, it has more than 27,000 units either in operation or in the pipeline.
In 2011, Ascott will open 12 new properties.
It also aims to sign another 12 new management contracts and/or invest in new properties this year, Mr Lim said.
For growth in Asia, Ascott is eyeing China, India and selected South-east Asian cities such as Kuala Lumpur, Jakarta and Manila.
China is expected to be a particularly fast-growing market for the group. Ascott has over 6,300 units in China now but plans to almost double the number to around 12,000 units by 2015.
In addition, the group is bullish on Singapore, where it currently has about 900 apartments in operation. Ascott will continue to look out for suitable sites in order to grow its market share, Mr Lim said.
Another region that the group is keen to grow its presence in is Europe. Ascott has more than 5,000 apartments across Europe now, and the target is to grow the Europe portfolio to more than 7,000 apartments by 2015.
'I think the current situation in Europe provides us with opportunities,' said Mr Lim, explaining that there are good bargains available as Europe is still suffering from the financial crisis.
CapitaLand chief executive Liew Mun Leong added that distressed hospitality assets are now being offered for sale in European cities such as Paris and Prague.
This year, Ascott will also invest some $70 million to refurbish 16 properties in its portfolio. A few properties in Europe are set to undergo major asset enhancement works.
CapitaLand shares closed unchanged at $3.81 yesterday.