CapitaLand's wholly-owned serviced residence business unit, The Ascott, is acquiring a 221-unit serviced residence in Docklands, Melbourne, for A$71 million ($71 million) as part of its partnership with Australian-based apartment operator Quest Apartment Hotels.

Quest will lease the serviced residence, which will be the largest property in its network, and operate it under its franchise when the property opens in 2019 as Quest NewQuay Docklands.

The Ascott-Quest alliance was formed in late 2014 under the agreement that Ascott will invest up to A$500 million in new properties which Quest will secure for its franchise in Australia until 2019. Ascott has a 20% stake in Quest with an option to increase it to 30%.

The company’s real estate investment trust, Ascott Residence Trust, owns three operating serviced residences in Greater Sydney acquired from Quest, namely Quest Sydney Olympic Park, Quest Campbeltown and Quest Mascot which are being operated under franchises by Quest.

The recent acquisition of the property in Docklands, Melbourne, marks the first acquisition in Australia and the fourth by Ascott in partnership with Qatar Investment Authority (QIA) under Ascott’s serviced residence global fund. The US$600 million global fund was set up through a 50:50 joint venture with QIA in July 2015 with each party contributing US$300 million of equity funds. Over the span of seven months, the fund has acquired four properties with a total investment amount of US$270 million.

In Australia, Ascott manages five serviced residences with more than 670 apartment units in Melbourne, Perth and Hobart under the Citadines and Somerset brands. Quest has more than 150 properties with over 8,000 existing units in Australia, New Zealand and Fiji, and a further 1,500 units under construction.