Addax the Middle East investment bank based in Bahrain, has announced a partnership with The Ascott Group, a leading international serviced residence company, to launch a cluster of serviced residences across the Middle East and North Africa (MENA).
Under the recently signed agreement, Addax will set up and manage the $1 billion investment fund to finance the acquisition of the properties, to be managed under The Ascott Group’s The Ascott and Somerset brands.
The Ascott Group has more than 15,000 serviced residence units in 40 major cities across Europe and Asia Pacific.
Yousef Al-Essa, General Manager of Addax Investment Bank, said: “The upscale serviced apartment market has been identified as one of the biggest growth areas in the region’s developing tourism industry.
“To reach World Tourism Organisation’s target figures of 69 million visitors to the Middle East by 2020, the Arabian tourism industry needs to develop new tiers of quality accommodation.
“In addition, the visitors’ average length of stay will increase thanks to entertainment and leisure mega projects – all of which mean the time is ripe to bring the sector’s leading brand to the Middle East and North Africa.”
Addax Investment Bank is fast gaining a reputation for innovative deals within the hospitality sector. In September, the Bank structured a US$150 million deal to launch 20 Express by Holiday Inn hotels across five countries in the Gulf Co-operation Council (GCC).
Al-Essa said: “As a Bank, we are opportunistic, and can see the ongoing opportunities in the tourism sector in the region, as well as the healthy return on investment in the sector.
“Hospitality in its greater sense – lodging, entertainment, restaurants is increasingly an area of expertise to us as we have earned a track record by structuring innovative transactions, with premier brands across the MENA region.”
The fund aims to acquire at least 15 properties across the MENA region by 2010. Each property will have between 120 and 250 units. The initial countries of focus are Bahrain, the UAE and Qatar.
Each property will run under either The Ascott brand, the group’s flagship catered for top executives, or Somerset brand, which caters for business executives who travel with their families.
The Ascott Group will manage the serviced residences, provide consultation on the development, design and renovation of the properties, and create marketing and branding programmes for the properties.
Cameron Ong, the group’s CEO, said: "This strategic alliance is in line with Ascott’s strategy to go asset light. It also enables us to increase our presence in MENA to tap into the region’s business potential and to respond to increasing demand for serviced residences in the region.
“As the largest international serviced residence owner-operator in Asia Pacific and Europe, Ascott is well-recognised in the industry for providing quality services.
“This alliance with Addax Investment Bank will enable us to leverage on each other’s strong brand reputation and expertise to provide serviced residences that cater to the needs of corporate executives and expatriates in the region.”
