Ascott inks pact with Rattha Group

Special Correspondent

To acquire and develop seven serviced residences across India

Each of the residences will have separate joint ventures and flexible equity ownershipIndian partner has acquired land in Chennai, Bangalore and Hyderabad

CHENNAI: Singapore-based Ascott Group has inked a master development plan with the Chennai-based Rattha Group to acquire and develop seven `serviced residences' across India by 2010. Under the master agreement, each of the seven proposed serviced residences will have separate joint ventures and see flexible equity ownerships between the Singapore group and Rattha.

(Serviced residences are also known as extended-stay hotels. They are designed to provide a home ambience for a traveller who may have to stay in an area for a few days.)

Ascott claims it is the largest global serviced residence owner-operator outside the U.S. It has close to 17,000 serviced residence units across the globe. It operates three brands - The Ascott, Somerset and Citadiness. The Rattha group is in the business of exports and infrastructure development. The alliance with the Ascott will herald its entry into the hospitality sector. The Chennai group says that it has acquired land banks in metros to facilitate its foray into the hospitality field.

The development of the proposed seven service residences is estimated to involve an investment of around $220 million (Rs. 1,000 crore). The Indian partner has already acquired lands in `strategic sites' in Chennai, Bangalore and Hyderabad.

Under the umbrella agreement, Ascott will manage these properties for a period of ten years with an option to renew the contract for another ten years. "Our strategy for India is to capitalise on opportunities in key high-growth emerging markets, while we set up a foothold in key gateway cities," said Cameron Ong, Managing Director and CEO of Ascott.

As a first step towards implementing the master plan, the two groups have entered into a joint venture agreement to acquire the first serviced residence in Chennai. The property, located in MRC Nagar, will be branded Somerset Greenways. It will have 210 units and comprise studios and one and two bedrooms. It is expected to go operational by the first half of 2008. In the Chennai venture, Ascott will have a 40 per cent stake and Rattha will hold the balance.

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