In 2021, CLI’s management justified the inclusion of Ascott in the RAM because by then, it was increasingly just a management business, like Marriott International, Accor, Hyatt Hotels and Hilton Worldwide, getting fee income from its management contracts all over the world.
When CapitaLand split its development business and kept its real asset management (RAM) business listed as CapitaLand Investment (CLI), analysts and market watchers were sceptical about the inclusion of The Ascott. The year was 2021; Singapore was tentatively emerging from its Covid-19 pandemic lockdown. The rest of the world was gingerly moving towards less isolationism. Travel restarted, hotels reopened their doors and occupancy rates were off the lows.
CLI included its Ascott business in the form of lodging management. Four years later, Ascott is very different from the entity that was taken private in 2008. Then, Ascott was a relatively asset-heavy business, owning serviced residences. In 2006, CapitaLand Ascott Trust (SGX:HMN
) (CLAS) was listed as Ascott Residence Trust, a REIT that owned serviced residences. This was turned into a stapled security when ART, as it was then known, acquired Ascendas Hospitality Trust, which comprised a REIT and business trust. CLAS’s assets comprise long-stay properties such as rental apartments and purpose-built student accommodation, serviced residences on master leases, and hospitality assets on management contracts.
