Centurion Corporation announced, on July 14, that its spin-off REIT will be named Centurion Accommodation REIT.
The new REIT’s portfolio will include 14 assets comprising five purpose-built worker accommodation (PBWA) assets in Singapore, eight purpose-built student accommodation (PBSA) assets in the UK and one PBSA asset in Australia.
Centurion Asset Management will be the manager of the REIT and Perpetual (Asia) will be its trustee.
In line with the REIT listing, the company has entered into letter agreements with Lian Beng-Centurion, Centurion Asset Management, Westlite Juniper (Mandai) Pte. Ltd., the manager and Lien Properties Pte. Ltd and Lian Beng Group.
This is in connection with the inclusion of Westlite Mandai, Westlite Juniper and Westlite Ubi into the REIT’s portfolio.
The proposed listing of the REIT will be subject to the approval of the Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX).
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Centurion announced on June 10 that it had submitted a listing application to SGX and MAS.
About the portfolio
In total, the PBWA assets have 21,282 beds and the PBSA assets have 2,772 beds as at March 31.
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The agreed property value used to determine the purchase consideration is $1,836.3 million for the initial portfolio and $2,116.4 million for the enlarged portfolio, also known as the agreed property value.
The valuations may be subject to adjustments due to revaluation exercises, which may be conducted on or after July 31.
According to a July 14 bourse filing, Centurion will divest its 100% interest in Westlite Toh Guan, its 100% interest in Westlite Woodlands and its 51% interest in Westlite Ubi to Centurion Accommodation REIT.
Lian Beng Group will divest the remaining 49% interest in Westlite Ubi to Centurion Accommodation REIT.
In relation to Westlite Mandai, Lian Beng-Centurion (Dormitory), as the master tenant, will surrender its existing lease to Lian Beng-Centurion (Mandai). The Mandai vendor, in which the Centurion owns 45% interest, will grant a leasehold estate for a term of 32 years, with an option to renew for 30 years, to Centurion Accommodation REIT.
In relation to Westlite Juniper, Lien Properties will grant a leasehold estate for a term of 50 years to Centurion Accommodation REIT.
Through the UK vendor, Centurion will divest its 99.87% interest in the eight PBSA assets located in the UK to Centurion Accommodation REIT.
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A third-party vendor will, through the UK vendor, divest the remaining 0.13% interest in the eight PBSA assets to Centurion Accommodation REIT.
The UK vendor will receive the purchase consideration for the divestment of these PBSA assets in the form of consideration units.
In Australia, Centurion will divest its 100% interest in dwell East End Adelaide to Centurion Accommodation REIT.
Following the IPO and the completion of Epiisod Macquarie Park, Centurion will divest its 25% interest. Centurion Properties, a controlling shareholder of Centurion, will divest the remaining 75% interest in Epiisod Macquarie Park to Centurion Accommodation REIT.
A master lease will be entered into to ensure stability of income for Centurion Accommodation REIT in relation to Epiisod Macquarie Park till end-2027.
Profit guidance
Centurion also said it will see a “significant increase” in its profits for the 1HFY2025 ended June 30 due to fair value gains on its investment properties compared to the fair value gain as at Dec 31, 2024.
Following the listing of Centurion Accommodation REIT and post-dividend in specie, Centurion’s net leverage ratio is expected to decrease significantly. “This will allow Centurion to strengthen its balance sheet and provide additional debt headroom for growth,” reads the bourse filing.
Centurion called for a trading halt prior to the market open on July 14. Prior to that, shares in Centurion were trading at $1.76.
