Singapore-based serviced apartment company The Ascott Group is to scale back its operations outside London in a bid to consolidate its UK business.
This week developer Crown Dilmun appointed US Serviced apartments provider BridgeStreet to run its 116 unit Atrium complex in Manchester.
The company is replacing Ascott, which had a £150m serviced apartments joint venture with the developer.
The change of management is the first for Crown Dilmun following the joint venture agreement with Ascott, which was signed three years ago.
The deal pooled both companies’ serviced apartments and created the largest operator of serviced apartments in the UK, all of which were managed by Ascott.
However, last summer Ascott bought rival serviced apartment chain Citadines in a separate deal and signalled its intention to concentrate on London.
Crown Dilmun, which had originally intended to put its serviced apartments in Manchester and Glasgow into the 783-apartment strong joint venture, said it was a joint venture decision as to whether the other serviced apartments would continue to be managed by Ascott.
However, market sources suggest that the company’s Singaporian management does not consider the UK market core to its growth.
Mark Minashi, managing director of Crown Dilmun, said: “The Atrium was the only Crown Dilmun serviced apartment building outside the joint venture after we sold Glasgow.
“Decisions on the management of the other buildings in the portfolio are down to the joint venture.”
Max Thorne, BridgeStreet’s director of development UK and Europe, said: “Acquiring the management of the Atrium is a significant part of our strategic growth plan for 2005.
“We are currently aiming to increase our UK and European properties under management by 30% each year.”
Ascott was unavailable for comment.
References: EGi News 07/02/05
