CapitaLand's serviced residence company The Ascott has purchased the Hotel Central Fifth Avenue New York. The company will invest approximately $50 million in renovations and rebranding to open Ascott's first Citadines residence in the U.S. in 2018.
Ascott predicts that Citadines Fifth Avenue New York will attract many business travelers, especially because of its close proximity to the offices of various companies, including IBM, Microsoft, Morgan Stanley, Bank of America and Verizon.
Ascott will add Citadines Fifth Avenue New York to its growing portfolio in the U.S. and internationally. The company's newest acquisition follows Ascott Residence Trust's purchase of the 369-unit Sheraton Tribeca New York Hotel and the 411-room Element New York Times Square West hotel in 2016 and 2015 respectively. The company will now manage more than 1,100 apartments across five properties in the Americas.
Lee Chee Koon, Ascott’s CEO, said in a statement. “The debut of our Citadines brand in North America is a significant move to expand Ascott’s global network of properties. Citadines is Ascott’s fastest growing brand having more than tripled its portfolio since our acquisition of the Citadines Apart’Hotels chain in Europe in 2004. We have since brought the brand to Asia Pacific, Middle East, South America and now the US.
According to Koon, Ascott is aiming to debut "80,000 units globally by 2020" as part of its plans for global expansion.
This new location in New York will increase Ascott's list of 10 properties with 1,900 apartments across China, Brazil, South Korea and the U.S. The company also recently opened four properties with more than 800 apartments. These include its first serviced residences in Jeju, South Korea, Makassar, India, Riyadh, Saudi Arabia and Tokyo, Japan.
The U.S. is Ascott’s third largest source market for guests.The U.S. market saw significant increases in ADR and occupancy in the past years–particularly in its Manhattan properties. Therefore, Koon argues that the potential for long-term returns in the U.S. market is attractive.
Koon also predicts the introduction of the Citadines brand will reinforce the cross-selling of other properties in Asia Pacific, Europe and the Middle East. According to Koon, the new opening will strengthen the brand's foothold in New York and generate opportunities for expansion in Boston, Los Angeles, San Francisco and Washington, D.C.