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CapitaLand enters into a joint venture with “China’s Airbnb”

Real estate company CapitaLand is investing over SG$120 million in a Beijing-based online apartment-sharing platform Tujia. Dubbed as the Chinese equivalent of U.S. home-rental website Airbnb, Tujia is valued at more than US$1 billion and caters to travellers looking for alternatives to hotels, for vacation as well as business travel within and outside of China.

CapitaLand’s wholly owned serviced residence arm, The Ascott Limited (Ascott), is leading a consortium to invest SG$67.69 million in Tujia. Ascott will also form a joint venture with Tujia with an initial capital of S$54.15 million. This joint venture led by Ascott will operate and franchise serviced apartments in China.

CapitaLand has confirmed to Marketing that this new joint venture will see Ascott operate serviced apartments in the key growth cities of China using a new brand.

Lee Chee Koon, CEO of The Ascott Limited,told Marketing that while Ascott’s  existing three brands – Ascott, Citadines and Somerset – target the top-tier segment of the China market, the new brand of serviced residences will cater to the growing mid-tier segment of domestic travellers in China. Planning for the new brand is still in its initial stages, Lee said.

In addition, CapitaLand has formed a new Technology Council consisting of  digital professionals to boost its digital efforts in driving its real estate business.The council members include venture capitalists Foo Jixun, managing partner of GGV Capital and David Su, managing partner of Matrix Partners China and Gabriel Lim, CEO of the Media Development Authority of Singapore.

Lim Ming Yan, president & group CEO of CapitaLand Limited, said: “With the wealth of experience and fresh perspectives of the council members, CapitaLand will gain much insight on using digital technology to decode the art of human needs and wants, so that we can create smart buildings for smart customers.”

“The council will also identify tech trends, challenges and opportunities to sharpen CapitaLand’s smart focus. This includes offering advice and guidance on how we can drive our growth through strategic collaboration with strong technology partners, such as Tujia. CapitaLand’s investment in Tujia through Ascott, gives us the opportunity to expand into a new vertical which will augment Ascott’s core strength,” added Lim.

Lee Chee Koon, Ascott’s CEO, who has also been appointed to the board of directors of Tujia, said: “By investing in Tujia, a frontrunner in the online apartment sharing platform, Ascott is now well positioned to benefit from this growth.  This investment will also allow Ascott to better integrate our offline resources with Tujia’s online capabilities to participate more strategically in the O2O space. We plan to make our three internationally recognised brands of serviced residences – Ascott, Citadines and Somerset – available on Tujia’s website for booking, expanding our reach to more customers online.”

Justin Luo Jun, co-founder and CEO of Tujia, said: “Our collaboration with Ascott will allow us to tap on Ascott’s expertise to offer more world-class serviced apartments and strengthen Tujia’s position as the leading online apartment sharing platform in China.”

Tujia’s website features more than 310,000 apartments covering travel destinations across China as well as overseas destinations such as Singapore, Bangkok, and Tokyo for Chinese outbound travellers.

Besides its online capabilities, Tujia operates some apartments for owners for a fee and franchises its business to third-party operators.

Ascott currently has over 14,000 apartment units in 77 properties across 24 cities, making it one of the largest international serviced residence owner-operators in China.

Meanwhile in April this year, Ascott partnered with Samsung Asia to jointly develop Internet of Things-ready smart solutions customised for its serviced residences, making Ascott the first global serviced residence company to embrace smart home technologies. At present, Ascott is working towards test-bedding at selected serviced apartments by first half of 2016.

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