"We believe the Epiisod brand will allow Centurion to tap into increasing affluence and rising numbers of international students in Australia," state the analysts in their July 21 report.
Separately, Tng and Tan figure that the REIT spin-off will crystallise $1.4 billion in value for Centurion shareholders.
The REIT, as indicated, consists of stable income-generating assets with no development risk.
For a start, the portfolio will consist of 5 purpose-built workers' accommodation in Singapore, 8 students' dorms in the UK and 1 in Australia
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The REIT will acquire Epiisod Macquarie Park when it reaches practical completion in Dec 2025, bringing the enlarged portfolio’s valuation to $2 billion.
Assuming net debt-to-asset ratio of 30% for the REIT, the analysts estimate spin-off value to be around $1.4 billion.
Given the strong demand for workers' accomodation in Singapore and Malaysia, plus growing international students amid tight housing supply in Australia, the CGS International analysts are keeping their "add" call.
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Also, they have taken into account contributions from the new properties and have tweaked their earnings estimates for FY2026 and FY2027 by an additional 6% and 5% respectively.
By using a pure RNAV valuation, instead of one blending PE and RNAV previously, they have derived a higher target price of $2.05 to better reflect CENT’s earnings profile that is largely driven by recurring rental income and long-term asset appreciation.
Centurion Corp shares gained 1.86% to change hands at $1.64 as at 11.26 am.
