First, the PBWA segment’s revenue in Singapore was boosted by contributions from the four quick build dormitories (QBDs), where two commenced operations in the 2HFY2020 and the other two commenced operations in the FY2021.
The average financial occupancy for the group’s five purpose-built Dormitories (PBDs) was 97% for 9MFY2022 as compared to 84% for 9MFY2021. Including the four QBDs, average financial occupancy for the group’s nine PBWAs was 97% for the 9MFY2022.
The group’s management services contracts for two onboard centres also expired, and the group has returned the properties to the government.
Next, the revenue growth from the group’s PBSA segment continued to outpace the growth in PBWA revenue, rising by 42% from $22.5 million to $31.9 million for the 9MFY2022 as bookings and financial occupancies across the group’s PBSA assets in the UK and Australia grew steeply in the 3QFY2022 and continued to benefit from the lifting of travel restrictions and a return of international students.
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In addition, the group’s portfolio of eight PBWA assets in Malaysia recorded a financial occupancy of 75% for the 9MFY2022 amid a slower recovery, as employers experienced delays bringing in migrant workers. Centurion however continued to grow its PBWA segment’s revenue as the migrant workforce gradually returned to pre-Covid-19 levels, driven primarily by strong improvements in financial occupancy at Westlite Bukit Minyak, Penang and Westlite – PKNS Petaling Jaya, Selangor.
The average financial occupancy of the group’s ten PBSA assets in the UK rose from 68% for 9MFY2021 to 90% for the 9MFY2022. This comes with the group’s announcement in May of the proposed acquisition of a 103-bed freehold PBSA asset in Nottingham, UK. However, on Oct 28, the company announced that the proposed acquisition was terminated.
Meanwhile, in Australia, the average financial occupancy of the group’s two PBSA assets increased from 26% for the 9MFY2021 to 68% for the 9MFY2022.
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“We are pleased that the group’s financial performance has continued to improve through the third quarter of 2022, as Singapore and the UK enjoyed high occupancies while Malaysia and Australia recovered closer to pre-Covid-19 levels of occupancy,” says Kong Chee Min, CEO of Centurion. “Rental rate reversions have been healthy, supported by strong demand across all markets, cushioning the effects of inflation and rising interest rates.”
On Oct 19, Centurion also announced the sale of its 55% stake in its South Korea Operating Company and Property Company, which owns the dwell Dongdaemun PBSA asset. The consideration for the disposal was KRW5.46 billion ($5.4 million) against the aggregated net tangible asset value of Centurion’s interests in the Korean entities at approximately KRW3.57 billion as at June 30.
The disposal is being carried out as part of an ongoing rationalisation of the Group’s asset portfolio to align and focus its asset portfolio on countries where the Group bears competitive advantage and is able to expand and scale up its operations.
Completion of the transaction is scheduled on Nov 30.
Additionally, in April, the group announced the commencement of the sale of its US PBSA portfolio, which is held under the Centurion US Student Housing Fund where the fund life is coming to the end of its initial five-year term, with an optional extension of two years. At present, Centurion holds 28.7% of the units in issue and is the manager of the fund and its assets.
Due to the current uncertain market conditions and interest rate environment, in the event that the sale does not close by the end of the fund term, Centurion intends to seek the fund investors’ agreement to extend the fund term by two years. Currently, the US portfolio enjoys high occupancy and healthy rental reversions for the academic year (AY) 2022/2023, and expects continued strong market demand for AY2023/2024.
Shares in Centurion closed at 1 cent up or 3.03% higher at 34 cents on Nov 1.
