CapitaLand Investment Limited - Annual Report 2021

FY 2021 Performance Review BUSINESS PERFORMANCE LODGING MANAGEMENT CapitaLand Investment’s (CLI) lodging business is a key growth driver for CLI as it is global, scalable and asset-light. With over 30 years of track record in the long-stay lodging segment, CLI has built a diversified portfolio comprising serviced residences, coliving properties, hotels, student accommodation, multifamily and rental housing properties as well as other hospitality assets. CLI’s wholly owned lodging business unit, The Ascott Limited (Ascott) is a vertically-integrated owner and operator of lodging properties globally with a strong Asia footprint. It has expertise across the full real estate value chain of deal sourcing, investment, asset and fund management, and award-winning hospitality operations. Ascott’s portfolio spans more than 200 cities across over 30 countries in Asia Pacific, Central Asia, Europe, the Middle East, Africa and the United States of America (USA). In recognition of Ascott’s operational excellence, Ascott received about 40 accolades in 2021 including being crowned the ‘World’s Leading Serviced Apartment Brand’ by guests and the industry at the World Travel Awards 2021. The World Travel Awards is a prestigious global event that celebrates the best in hospitality. Ascott was the biggest winner with the greatest number of awards received amongst serviced apartment players, sweeping a total of 28 accolades at the Grand Final and regional levels. 1 Based on inventory available for sale. BOOSTING RECURRING FEE INCOME THROUGH RECORD GROWTH DESPITE COVID-19 Despite COVID-19 headwinds, Ascott signed 15,100 units across 72 properties in 2021. This marks the fifth consecutive year Ascott has achieved record growth in new units organically. More than 80% of the new units secured in 2021 were under management and franchise contracts, in line with Ascott’s asset-light growth strategy. Ascott continued to expand in growth markets and made inroads into 17 new cities. As at 31 December 2021, Ascott has over 133,000 units, on track to achieve its target of 160,000 units by 2023. Ascott’s recurring fee-related earnings in 2021 increased by 27% year-on-year to S$190 million 1 . Ascott opened a record high of over 8,200 units in 40 properties across 25 cities and 10 countries. This is more than double the units opened in 2020. Ascott’s overall revenue per available unit 2 also rose 19% year-on-year, with stronger occupancy levels as international travel gradually resumes. Notably, Ascott continues to see strong domestic demand in China. Ascott’s resilient base of long-stay corporate guests and the strong domestic leisure travel market have enabled Ascott’s serviced residences in China to achieve robust occupancy rates. In 2021, Ascott’s properties in China’s tier one cities such as Beijing, Guangzhou, Shanghai and Shenzhen, achieved an average occupancy rate of over 80%, exceeding the market average of around 57%. In Vietnam, Ascott secured a record of about 3,000 new units, exceeding full-year signings in previous years. This includes Ascott’s partnership with Sun Group, one of the biggest real estate developers in Vietnam. Ascott will manage the country’s largest serviced residence integrated development, comprising 1,905 units across three distinct serviced residence brands within the Tay Ho View Complex in Hanoi. The iconic integrated development will be Hanoi’s new landmark, transforming the city’s skyline and rejuvenating the city’s exclusive waterfront Tay Ho district. The three serviced residences are expected to open in phases from 1Q 2023. Ascott’s coliving brand, lyf, also grew to a total of 18 properties, with over 3,300 units in 14 cities and nine countries in 2021. lyf made its debut in China with the opening of lyf Mid-Town Hangzhou in September 2021. Designed for the next generation of travellers, lyf one-north Singapore which opened in November 2021 has seen strong demand with an occupancy of 96%¹ during the first phase of opening. With over 30 years of track record in the long-stay lodging segment, CLI has built a diversified portfolio comprising serviced residences, coliving properties, hotels, student accommodation, multifamily and rental housing properties as well as other hospitality assets. Excludes Multifamily. 2021 2023 LODGING UNITS UNDER MANAGEMENT >133,000 Target 160,000 Ascott secured the contract to manage Vietnam’s largest serviced residence integrated development, comprising 1,905 units across three distinct serviced residence brands within the Tay Ho View Complex in Hanoi. Ascott’s first lyf-branded coliving property in China, lyf Mid-Town Hangzhou, opened in September 2021. It is located in the Gongshu district, near the Grand Canal, a popular UNESCO World Heritage site noted for its historical relics. 1 Revenue for lodging management includes service fee recovery income. 2 RevPAU statistics are on same store basis and include serviced residences leased and managed by the Group. Foreign currencies are converted to SGD at average rates for the relevant period. Annual Report 2021 41 CapitaLand Investment Limited 40