Ascott Limited, a subsidiary of Singapore-listed real estate company CapitaLand, and the $337-billion Qatar Investment Authority have teamed up to jointly acquire the new 221-room, $71-million Quest NewQuay Docklands apartment-hotel in Melbourne. The property is currently under development by MAB Corporation at its New Quay waterfront precinct.
Construction of the new hotel, Quest's biggest apartment-hotel complex to date, is slated to start in early 2017. The hotel itself is due to open in 2019.
A Valuable Partnership
The investment is the first by Ascott Limited since it struck a $500-million agreement with Quest in late 2014 to invest in new hotel developments. At the same time, Ascott Limited acquired 20 percent of Quest for $28.8 million while its listed real estate investment trust, the Ascott Residence Trust, acquired three Quest apartment-hotels in Western Sydney for $83 million.
The Docklands acquisition is the first in Australia and fourth globally by Ascott and QIA as part of a $600-million joint serviced-apartment fund they established in 2015.
Quest founder and chairman Paul Constantinou said that the supply of new hotel rooms had lagged demand in most markets mainly due to a lack of support from domestic institutions. "Investment from large-scale Asian groups like Ascott will enable the sector locally to meet the demand," he said.
The Docklands deal represented the "blueprint" for how the partnership would operate in the future, Constantinou said, and will help Quest accelerate its rollout of new hotels across Sydney, Brisbane and Melbourne.
Last year, Ascott REIT acquired the 380-room Citadines on Bourke Melbourne Hotel (pictured above) from its parent Ascott Limited for $158.5 million. It also owns the Citadines St. Georges Terrace in Perth. Quest, meanwhile, operates more than 150 hotels in Australia, New Zealand and Fiji under a franchise model with more than $1 billion of new hotels due to be completed over the next three years.