Quest set to explore the Singapore market

Quest set to explore the Singapore market
Dec 22, 2009 - PropertyGuru.com.sg

Quest, a serviced apartment provider based in Australia is interested to break into the Asian market, beginning with Singapore. It has properties in Fiji, New Zealand and Australia.

Paul Constantinou, chairman of Quest, said that Singapore is a ‘priority market’, with its ability to lure both business travelers and investments and its stable economic performance.

“We know the market conditions here and have seen the industry to be a resilient one,” he said, referring to the Ascott Group and Frasers who have also set up in Australia. “The market is now ready for individual players to buy into the industry.”

The business model of Quest operates mainly on a franchised system. Apartments are built by Quest or a developer, and are sold to property trusts and individual investors, who lease it back to Quest for 25 years. Franchisees can buy the rights to manage the serviced apartment.

In Singapore, Quest hopes to associate with land owners and local developers.

Mr. Constantinou sees a rising tide of people who want to get involved in the serviced apartment industry, due to the growing wealth in Asia.

“Based on our own experience of starting out with a mix of company-owned and franchised properties, we found that franchised properties were able to deliver a better bottom line and scored a 15 per cent to 20 per cent better performance,” Mr. Constantinou said.

“The benefits of franchising are that the person who owns the business runs the business and there is certainty of income for the developer. Developers want the surety of income over extended periods of time.”

Currently, Quest owns 128 properties in New Zealand, Australia and Fiji, with 74 franchisees.