Dormitory operator Centurion Corporation is paying A$45 million to acquire an asset in Western Australia meant for the mining industry, marking its entry into a new specialised segment. Centurion Corp believes this acquisition will be earnings accretive.
The asset, at Karratha, consists of Velocity Village, a 93-room worker accommodation facility with 186 beds, and Velocity Motel & Bistro, which offers 135 executive-style single-occupancy rooms and associated amenities.
The Pilbara region, in which this asset is sited, is Australia's largest resource and employment centre, accounting for example 90% of the iron ore production, supporting over 13,000 jobs.
According to Centurion, the workers who keep the operations going tend to be "fly-in, fly-out", rotating between home regions and project sites on regular rosters, and requiring quality managed accommodation during each working cycle.
Kong Chee Min, CEO of Centurion Corp, says that with the spin off listing of Centurion Accommodation REIT, Centurion Corp is "well positioned" to deploy capital into other growth opportunities.
"With this acquisition, we are entering a new segment – key worker accommodation, with an existing, income-generating asset that fits our platform and creates value from the onset," says Kong.
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"We see potential to build this into a meaningful segment, and we will pursue that with the same discipline that has defined our growth to date," he adds.
Centurion Corp shares closed at $1.68 on April 17, up 0.6% for the day and up 22.63% year to date.
