CapitaLand

CapitaLand (S$3.02): Four new contracts solidify Ascott’s leadership in China

The property group’s wholly owned serviced residence unit, Ascott has secured four management contracts for four serviced residences properties, totaling 583 units in China.

The four properties comprise:
1) Ascott Beijing (162 units, opening in 2016); located in CBD
2) Citadines Jinxiu Shanghai (142 units, opening in 2019); located in Pudong New Area
3) Citadines Putuo Shanghai (154 units, opening in 2019); located near Nanjing West Road
4) Citadines Gugeng Dalian (125 units, opening in 2016); located in the Dalian Economic and Technological Development Zone

All the properties are well located in close proximities to local business districts, malls and railway stations.

The latest contracts reinforce Ascott’s position as the largest international serviced residence owner-operator in China with more than 14,300 units in 80 properties across 24 cities.

Ascott’s management continues to see strong demand growth for serviced residence in China, and also expects its growing presence to help other properties worldwide in tapping the ballooning outbound Chinese travellers.

In addition, the serviced residence operator believes its recent investment in Tujia.com, China’s largest online apartment sharing platform, will hold the key to its mainland growth strategy.

CapitaLand, which owns 100% of Ascott, is currently trading at 19.7x forward P/E and 0.75x P/B.

The street has 19 Buy and 3 Hold ratings on the counter, with a consensus TP of $3.98