Loh, citing the REIT's high-occupancy and balanced yet growing portfolio, expects steady and visible income growth.
"The robust sector fundamentals, given the tight purpose-built workers' accommodation supply in Singapore and expanding purpose-built student accommodation markets in the UK and Australia, drive multi-year revenue visibility in our view," says Loh in his Oct 28 note.
He expects the REIT to enjoy a net property income uplift of 11% in the coming FY2026 and coupled with the long weighted average lease expiry for the bulk of its assets, the REIT offers "durable cashflows and embedded capital appreciation potential."
For inorganic growth, the REIT enjoys rights of first refusal from its sponsor Centurion Corp for its pipeline of potential acquisitions.
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Loh points out that the REIT's low initial leverage of 20.9%, which will go up to 31% following a well-telegraphed acquisition to be made in Sydney, means it has plenty of debt headroom, thereby reinforcing both income stability and scalable future expansion.
Loh's target price of $1.23 is based on a dividend discount model (DDM) with a projected dividend yield of 6.2% for 2026 and 7.2% for 2027.
At 6.2%, the projected yield is 0.5ppt above the average of UOB Kay Hian's Singapore REITs coverage universe.
Centuron Accommodation REIT closed at $1.06 on Oct 28, unchanged for the day but up just over 20% since its IPO price of 88 cents.
