YOKOHAMA - Serviced apartment provider Oakwood has secured over 3,000 units across more than 20 properties since it was acquired by CapitaLand Investment’s (CLI) lodging arm, The Ascott, in the second half of 2022.

Ascott on Jan 18 said its Oakwood portfolio has grown by more than 20 per cent to almost 18,000 units, up from about 15,000 units at acquisition, making it one of the company’s fastest-growing global brands in 2023.

Oakwood has been expanded to 48 cities, including Busan in South Korea, Ha Long in Vietnam, as well as several new markets in Indonesia, Malaysia and India.

Mr Kevin Goh, chief executive of Ascott and CLI Lodging, said the uplift in revenue and improved margins led to an improved financial performance for the Oakwood portfolio, which includes brands such as Oakwood, The Unlimited Collection, and other unbranded properties.

For example, two properties it took over from other operators in Jakarta and Manila were converted and began operations within months of their signings in 2023.

Mr Goh said: “With more operationally ready properties coming on stream at a faster pace, we are seeing immediate contribution of the Oakwood portfolio to Ascott’s recurring fee income, which is in line with our aim to double fee earnings to more than $500 million by 2028.”

CLI in July 2022 announced that it was buying Oakwood Worldwide from Mapletree Investments for an undisclosed amount.

The move was aimed at providing further fee income stability for Ascott amid global travel recovery post-Covid-19.

In its third-quarter business update published in November 2023, CLI posted a 3 per cent drop in revenue, due to an 8 per cent decline in the revenue of its real estate business.

But it still reported growth in its fee-based business, which stood at $249 million, led by stronger operating performance and higher contribution from Oakwood.

Mr Goh said: “Ascott will continue to pursue transformative deals, which can accelerate our expansion and provide us with immediate access to new markets, diverse customer bases and valuable synergies.”

Oakwood, known for its serviced apartments for corporate travellers, will also offer more city hotels and full-service resorts as part of efforts to refresh its brand.

Oakwood Ha Long, a villa resort, was opened earlier in January, and another two resorts, in Bali and Chongli in northern China, will open in the first half of 2024.

The refreshed Oakwood brand aims to provide “comforts of home and beyond”, while Oakwood Premier, targeted at the upper upscale segment, will have “a touch of luxury”, the firm said.

Ascott managing director for brand and marketing Tan Bee Leng said the refresh was targeted at the changing needs of business travellers as the firm observed more people extending their work trips for leisure purposes.

For instance, rooms will have dedicated workspaces with USB ports, and guests can take part in activities such as marathon cooking sessions and food festivals.

“Our refreshed Oakwood brand aims to address this growing market of business professionals who increasingly value holistic travel experiences,” said Ms Tan.

The brand refresh is expected to be rolled out at all existing Oakwood properties by 2025.

In a media briefing in Oakwood Suites Yokohama on Jan 18, Mr Christian Baudat, Ascott’s country general manager for Japan, said that Japan is the firm’s second-largest source market, with the acquisition of Oakwood doubling its portfolio there. After the acquisition was completed, Oakwood’s revenue per available unit grew about 50 per cent year on year in 2023, he added.

He also said long stays made up 60 per cent of Ascott’s business in room nights in Japan in 2023, while short stays made up about 65 per cent of revenue.

When asked if Ascott would focus more on short stays, Mr Baudat said its flex-hybrid business model – which allows for custom duration of stay, room occupancy and services – lets the company provide more short stays when there is demand, but it will continue to focus on long stays.

Meanwhile, Ascott on Jan 16 launched lyf Ginza Tokyo, the co-living brand’s second property in Japan, in addition to lyf Tenjin Fukuoka, which opened in 2021.

The 140-unit property in Ginza, an upmarket shopping district, brings Ascott’s Japan portfolio to 2,900 units in 22 properties across five brands, including Ascott, Oakwood, Somerset and Citadines.

A third lyf property is expected to open by 2024 in Shibuya, one of Tokyo’s most popular neighbourhoods.

Ascott has over 30 lyf co-living properties in operation and in the pipeline, comprising more than 5,500 units in 21 cities. These include four in Singapore – in Funan, one-north, Farrer Park and Bugis. The Bugis property was jointly acquired by Ascott and CapitaLand Wellness Fund earlier in January.

Ascott aims to have 150 lyf properties with more than 30,000 units by 2030.