CapitaLand said on Monday that its wholly owned serviced residence business unit, Ascott, is leading a consortium investing $67.69 million in Tujia, an online apartment sharing platform which has been dubbed the Chinese equivalent of US home-rental website Airbnb.
Ascott will also form a joint venture with Tujia with an initial capital of $54.15 million. The joint venture led by Ascott will operate and franchise serviced apartments in China under a new brand. These will include newly sourced properties and Tujia’s serviced apartments in China that are deemed suitable for conversion.
The venture will provide Ascott with a pipeline of apartments units to expand its portfolio in China where it targets to achieve 20,000 units by 2020.
Beijing-based Tujia’s apartment sharing site, valued at more than US$1 billion, caters to travellers looking for alternatives to hotels, for vacation as well as business travel within and outside of China. Its website features more than 310,000 apartments covering 388 travel destinations across China as well as overseas destinations such as Bangkok, Singapore 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.
Mr Lee Chee Koon, Ascott’s CEO, who has also been appointed to the board of directors of Tujia, said: “China’s lengthening list of billion-dollar technology startups is an indication of investors’ confidence in the country’s booming internet sector, including O2O (both Offline-to-Online and Online-to-Offline) commerce. The growth of mobile internet connectivity via devices like smart phones and tablets has enabled O2O commerce to thrive and establish itself as a mainstream market at an exponential rate, especially in China where the size of the market is considerably greater than just physical transactions. By investing in Tujia, a frontrunner in the online apartment sharing platform, Ascott is now well positioned to benefit from this growth.”
CapitaLand also announced on Monday that it has formed a new technology council to boost its digital efforts to drive its real estate business. It said the council members are notable venture capitalists Foo Jixun, managing partner of GGV Capital, and David Su, managing partner of Matrix Partners China, as well as Gabriel Lim, CEO of the Media Development Authority of Singapore.
Said Lim Ming Yan, president and group CEO of CapitaLand: “CapitaLand’s technology drive is part of the group’s efforts to sharpen our customer-centric focus to develop real estate of the future – integrated and interconnected smart communities through smart buildings as well as seamless online and offline customer experiences. We are privileged to have stellar tech visionaries join us in the CapitaLand Technology Council.
“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.”
Learn more in our Global Ready China Seminars
Article: Straits Times / Image: TuJia