Units in Centurion Accommodation REIT will list at 2pm on Sept 25. This will be the first pure-play purpose-built living portfolio listed on the Singapore Exchange (SGX) and second-largest Mainboard listing this year.
The public tranche of 13.2 million units will open at 10pm on Sept 18 and will close at 12pm on Sept 23. Each unit will be priced at 88 cents. The REIT aims to raise $771.0 million from the initial public offering (IPO).
In its prospectus released on Sept 11, the REIT has projected a distribution per unit (DPU) yield of 7.47% for FY2026 and 8.11% for FY2027 based on the offering price and the enlarged portfolio of 15 assets.
The REIT’s portfolio comprises five purpose-built workers’ accommodation (PBWA) assets in Singapore, eight purpose-built student accommodation (PBSA) assets in the UK and one PBSA in Australia. The REIT also has a right of first refusal (ROFR) arrangement with its sponsor, Centurion Corporation.
In a briefing to the media, Tony Bin, CEO of the manager, said that there is demand for the REIT’s assets given the strong demand from infrastructure and property development sites in Singapore and other growth areas such as petrochemicals and refineries. About 83% of its beds don’t have sector restrictions as well.
With about 400,000 to 500,000 foreign workers compared to a total number of 124,700 permanent PBWA beds, the demand ratio is favourable. Rents per bed have also grown progressively from $250 in 2019 to about $550 presently. Occupancy and rental growth are expected to continue to grow in the foreseeable future.
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For now, the REIT has a diverse group staying in its PBWAs with 70% to 80% residents from India and Bangladesh, as well as other residents from Myanmar, Thailand and China.
On PBSAs, the REIT has also identified a steady demand from the growing number of young people who are about to head to university. In the UK, about two thirds of the REIT’s clients are domestic, while about 90% of its Australian clients are made up of international students, with a “bigger chunk” from China.
For the three months ended March 31, the REIT’s PBWA portfolio occupancy rate is at 96.9% while its PBSA portfolio occupancy rate is at 97.5%.
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Bin points out that about 86.3% of its portfolio is either freehold, or leasehold for a period of over 30 years by the agreed property value. “Our tenures are much longer-dated than industrial than industrial leases or data centre leases, which are about 30 years,” he continues. This means, in the mid-term, the REIT won’t have to worry about expiring leases or worry about paying land levies.
Based on the initial portfolio, the REIT’s PBWA assets make up 73.3% going by the agreed property value, and at 63.6% within the enlarged portfolio. By net property income (NPI), PBWAs make up 80.8% within the initial portfolio and 73.4% within the enlarged portfolio.
This is regarded as a “tremendous advantage” compared to recent listings that work in US dollars, says Bin. He adds that the REIT is denominated in Singapore dollars, which has “held up well against other currencies”.
While the REIT’s expanded investment mandate includes other asset classes such as co-living spaces, senior housing and build-to-rent, as well as other geographies except Malaysia, it will focus on PBWAs and PBSAs for the time being. The next two years will keep the REIT "relatively busy", says Bin. There are certain enhancement works the REIT will have to work on, but it will also look at fresh deals concurrently.
More importantly, the REIT will need to provide stable income and cashflow. As such, it will not be able to take on development risk beyond a certain limit, and it can't take uncertainty, in any case.
For the forecast period from Oct 1 to Dec 31 this year, the REIT’s enlarged portfolio is likely to report gross revenue of $46 million.
In FY2026 ending Dec 31, 2026, gross revenue is tipped to be at $209.1 million while gross revenue for the FY2027 is forecast to be at $218.2 million.
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NPI for the last three months of FY2025, FY2026 and FY2027 are expected to be at $32.5 million, $151.7 million and $159.1 million respectively.
Read more about Centurion Accommodation REIT:
- PhillipCapital maintains $2.01 target price on Centurion Corp with REIT poised for spin-off
- Can Centurion’s REIT spin-off mark a new growth chapter?
- Centurion Accommodation REIT to offer 262.2 mil units at 88 cents apiece
- Shareholders of Centurion vote overwhelmingly in favour of REIT listing
- RHB increases Centurion’s target price to $2.01 ahead of REIT listing
- Centurion’s next Epiisod with Sydney in lead role
- Centurion Corp launches new premium student housing brand and property in Sydney’s Macquarie Park
- Centurion announces new REIT’s name; announces entry into letter agreements for REIT listing
- Application to list properties via REIT submitted to SGX and MAS, says Centurion
- Centurion Corp to explore REIT listing
