Investors and shareholders have much to smile about as The Ascott Group (Ascott) registered profits of S$151.3 million in FY 2006 - 3.6 times more than the net profits for FY 2005.

This result has been largely attributed to Ascott's strategy in actively managing its properties and monetising assets to realise their capital values. It also divested investments and properties worth over S$1 billion, with part of it going into its serviced residence REIT – Ascott Residence Trust (ART). The divestments yielded more than S$650 million in returns for Ascott.

In 2006, Ascott continued its aggressive expansion plan with the acquisition of 14 properties and eight new management contracts in the Asia Pacific and Gulf regions. It grew its footprint to new countries such as India, Bahrain and Qatar during the year and announced its entry into Russia in February this year.

The Ascott Group's (Ascott's) latest collaboration with longstanding partner, Mitsubishi Estate Co Ltd, sees its portfolio in Japan increase to three properties.

Ascott has signed a Memorandum Of Understanding to acquire a prime site in the busy business cum shopping and entertainment district of Shinjuku and will hold a 40% equity stake in the property.

The first Citadines in the Group's portfolio in Japan, Citadines Tokyo Shinjuku is a 160-unit serviced residence located in the heart of Tokyo's most popular district and is close to the Marunouchi and Toei Shinjuku train stations. Scheduled to open in the first half of 2009, the serviced residence will feature studio and one-bedroom units.

Citadines Tokyo Shinjuku complements the stylish Somerset Azabu East and elegant Somerset Roppongi, both of which are close to the business and shopping district and are spacious and well-equipped, with each property boasting a wide range of facilities and services.

Earlier this year, Ascott Residence Trust (ART) entered into conditional sale and purchase agreements to acquire a new property in Tokyo, Japan as well as increase its existing stakes in two serviced residences, one in Tokyo and the other in Ho Chi Minh City, Vietnam.

In Tokyo, ART will acquire the 79-unit Somerset Azabu East, Tokyo from Mitsubishi Estate Co Ltd (MEC), one of Japan’s largest real estate developers, at a property value of ¥5.7 billion (about S$79.8 million). It will also be increasing its stake in Somerset Roppongi, Tokyo, a 64-unit residence by acquiring the remaining 60% interest owned by MEC and MEC Roppongi Funding Corporation at a proportionate property value of ¥2.6 billion (about S$36.4 million).

In Ho Chi Minh City, ART will be acquiring a 40.2% stake in Somerset Chancellor Court, Ho Chi Minh City, from The Ascott Group. This will increase ART’s stake in the property to 67%.

Upon completion of the latest acquisitions by April 2007, ART’s portfolio will expand to S$1.2 billion, comprising 18 properties in 10 pan-Asian cities across seven countries.

The Ascott Group (Ascott) is tapping on Russia's increasing demand for quality serviced residences by signing a Memorandum Of Understanding (MOU) with Amtel Properties Development (Amtel), an established property development group in Russia. This development makes Ascott the first international, branded serviced residence owner-operator to enter Russia.

Together, the two companies will jointly contribute an equal share to an initial fund of US$100 million. Ascott will take 50% equity in the fund and manage the serviced residences, while Amtel will take the remaining 50% equity and the role of identifying potential sites and developing the serviced residences. Building on this fund, Ascott targets to launch 1,000 serviced residence units in Russia by 2010.

In addition to the MOU, the Group was also awarded a management contract by Amtel to manage Somerset Strogino, Moscow, a 150-unit serviced residence located in one of Moscow's technology business parks along Kulakova Street. The property is scheduled to be completed in 2009.