Singapore Exchange-listed Centurion Corp is looking to grow its purpose-built workers&rsquo accommodation (PBWA) market by expanding to manufacturing hotspots in Malaysia, given the relatively untapped potential of such housing in the country.

 

The company is looking to double the number of beds it has in Malaysia from the existing 28,000, investing between RM300 million ($90.8 million) and RM500 million, over the next three to five years.

 

The provider of PBWA &mdash under the brand Westlite &mdash has focused its attention on Penang, where it plans to add more assets to its portfolio.

 

&ldquo We are really looking actively in Penang, and it is all about getting a piece of suitable land. It must make economic sense for us. So, the land cannot be in the prime [industrial] areas, but close enough,&rdquo Centurion CEO Kong Chee Min tells The Edge Malaysia in an interview.

 

He reveals that the company is looking for a greenfield parcel for its expansion in Penang and acknowledges that finding suitable land is not an easy feat.

 

Centurion currently has about 3,300 beds in the state in Westlite Bukit Minyak. Notably, it undertook a sale and leaseback agreement of 15 years for its PBWA in Westlite Bukit Minyak with Kumpulan Wang Persaraan (Diperbadankan) (KWAP) last year. A similar agreement was inked with KWAP in 2024 for its asset &mdash a 5,790-bed PBWA &mdash in Westlite Tampoi in Johor Bahru.

 

Kong says the Klang Valley and Johor are also potential areas for expansion, given the vast number of manufacturing facilities in these areas. In the Klang Valley, the company has about 6,000 beds while the bulk of its assets are in Johor, where it has 18,700 beds.

 

He adds that Centurion is looking for opportunities to increase the bed count in Johor, either through brownfield or greenfield developments.

 

&ldquo We have a piece of land in Iskandar Puteri that we are exploring for a 7,000-bed PBWA development. We are also looking at the Johor-Singapore Special Economic Zone (JS-SEZ) in terms of [potential] economic activity, and if the economic activity increases [with more manufacturing companies investing in the area], then we will have a role to play there,&rdquo says Kong.

 

Centurion has expressed interest in investing specifically in JS-SEZ over the next three to five years, with Malayan Banking Bhd (Maybank) facilitating the submission of the PBWA provider&rsquo s letter of intent to the Iskandar Regional Development Authority in May.

 

Kong says the steep undersupply of PBWA in Malaysia has meant that the authorities have allowed shoplots and residential housing to be made into temporary housing for foreign workers, or temporary living quarters (TLQ). This means that sometimes, the requirements for liveable conditions are not met and they lack proper amenities.

 

The International Organization for Migration stated in a 2023 report that Malaysia, which had 2.7 million registered foreign workers in 2021, had many migrant workers living in overcrowded and substandard conditions.

 

&ldquo With more PBWA, the government will be able to achieve compliance under Act 446, because there&rsquo s accountability in terms of the capacity of workers in the accommodation, and it&rsquo s about their safety as well,&rdquo says Kong, adding that it will take some time before Malaysia has sufficient supply of PBWA to house migrant workers, like in Singapore. In Singapore, Centurion has about 36,400 beds in the PBWA space.

 

While Malaysia&rsquo s attempts to restrict the number of registered migrant workers in the country has impacted Centurion&rsquo s revenue for 1QFY2025 ended March 31, Kong is hopeful that the adverse impact is short-lived. In 1QFY2025, its PBWA revenue in Malaysia dipped by 1% to $4.8 million, with the average occupancy rate falling 14 percentage points year on year to 82% due to the freezing of foreign worker recruitment.

 

&ldquo We hear from our customers that they are facing a shortage of manpower right now, so we hope the government will gradually lift the restrictions again. This is not the first time the cap on foreign workers has happened. We&rsquo re hoping that it is a short-term issue, where they will eventually open it up again gradually because of demand requirements,&rdquo he says.

 

Centurion&rsquo s business in Malaysia largely relies on new batches of migrant workers that come into the country to work as the existing ones usually already have accommodation.

 

&ldquo When new foreign workers come in, it&rsquo s easier for us to [tap that market] because the employers will place their workers straight into our dorms. But those who are already here are currently staying somewhere, usually the shoplots and other places,&rdquo Kong explains.

 

This could change if the government shuts down TLQ. &ldquo We will see demand go up for [accommodation for] existing foreign workers in Malaysia if the government closes down the TLQ. We are hoping that the Malaysian government supports the PBWA. Otherwise, no one would want to build the accommodation because of the uncertainty. So it is a chicken-and-egg scenario that we are facing in this industry in Malaysia,&rdquo he says.

 

Even so, Kong believes in the potential of PBWA in the Malaysian market, where the shortage of such accommodation presents an opportunity for the company to expand further. &ldquo We want to have the first-mover advantage of putting in workers&rsquo accommodation in the right place and at the right time in order to meet demands,&rdquo he says.

 

While the bulk of Centurion&rsquo s revenue is derived from PBWA, the company is also in the business of providing purpose-built students&rsquo accommodation (PBSA) in Australia, the UK, the US, Hong Kong and China. It also entered into a new asset class of the built-to-rent (BTR) segment in Xiamen, China, where it secured a 20-year master lease of 400 apartments in 2024.

 

In FY2024, Centurion&rsquo s total revenue amounted to $253.6 million, with $194.6 million coming from its PBWA segment. Singapore was the key contributor at $176.1 million while Malaysia contributed $19.27 million. PBSA contributed $58.2 million to its revenue.

 

For its PBSA, Centurion plans to increase the number of beds in Australia and the UK, where it currently has 879 and 2,786 beds respectively.

 

While the company seeks to expand its portfolio in both PBWA and PBSA, it is cognisant of its limited funds and mindful that its gearing is currently at 30%. This is where its plans for a REIT come in.

 

Its plans for a REIT, which were announced earlier this year, could be put in motion within a year. But, as Kong says, they are largely dependent on factors such as market conditions and regulatory approvals, as is the case with any initial public offering.

 

In an announcement to the Singapore Exchangeon June 10, Centurion said it had submitted the listing application for the proposed IPO for the REIT to the stock exchange regulator, as well as various applications to the Monetary Authority of Singapore, and they are now under review.

 

The REIT would help the company scale faster as the strategy is to divest a certain amount of assets to the REIT in exchange for property management fees, which provide a better return on equity, says Kong.

 

&ldquo It is also part of our asset-light strategy, where there is an exit for us. We can put the assets in the REIT. From it, we will be able to recycle capital and keep on growing,&rdquo he adds.

 

&ldquo The REIT will need to be sizeable. While only selected assets from Centurion will be divested there, there are some other assets that are not only from Centurion that will go into the REIT as well.&rdquo

 

If the plans come to fruition, the REIT could be the first of its kind in Southeast Asia, offering investors exposure to the PBWA market.

This is the highest price they have risen to since they started trading in 1995

 

[SINGAPORE] Shares of Centurion : OU8 +3.38%rose on Wednesday (Jun 11) afternoon after the company announced its listing application of a real estate investment trust (Reit) to the Singapore Exchange (SGX) and the Monetary Authority of Singapore.

 

As at 1 pm, the counter had climbed to S$1.53, 3.4 per cent or S$0.05 higher than its Tuesday closing price of S$1.48, with around 2.4 million shares changing hands, ShareInvestor data showed. This is the highest price Centurion shares have risen to since they started trading in 1995.

 

On Tuesday, Centurion said that the application was still under review, but the Reit it is aiming to establish will comprise some of the group&rsquo s worker and student accommodation assets.

 

The company noted that the details of the initial public offering (IPO) and proposed establishment are still being finalised.

 

&ldquo The listing of the Reit will be subject to, among other things, market conditions, commercial negotiations, the relevant regulatory, shareholders&rsquo and other approvals being obtained, and the execution of definitive agreements by the relevant parties,&rdquo it added.

 

In a bourse filing on Jan 7, the group had expressed its interest in exploring the establishment of the Reit. Centurion chief executive officer Kong Chee Min said that the company was also considering a dividend-in-specie of some of the units in the proposed Reit held by the company to shareholders.

 

Centurion was previously featured in RHB&rsquo s Singapore Small Cap Jewels 2025 report as one of its top stock picks, among other companies with small market capitalisation.

 

Analysts cited favourable demand-supply dynamics and a robust pipeline of expansion projects across key markets as the drivers for the company.

 

Headquartered in Singapore, Centurion operates purpose-built worker accommodation (PBWA) in Singapore and Malaysia, and student housing in Australia, the UK and the US.

 

For its first quarter ended Mar 31, Centurion posted a 13 per cent increase in revenue to S$69 million. This was driven by positive rental revisions across markets, and strong financial occupancies both in Singapore and the UK.

 

Revenue from the PWBA segment grew 15 per cent to S$53.4 million from S$46.2 million in the year-ago period. Meanwhile, revenue from its purpose-built student accommodation segment rose 2 per cent to S$15 million from S$14.7 million a year ago.

 

Part of the growth in earnings was due to the ramp-up of new capacity, including a new 1,650-bed facility in Westlite Ubi, which became operational in late 2024.

 

Alfie Yeo, RHB Singapore&rsquo s head of small-mid cap research, expects Centurion&rsquo s earnings to rise by 4 per cent annually for FY2025 and FY2026, and 5 per cent for FY2027, on the back of stronger-than-expected bed rates and occupancy levels across its PBWA and student housing segments.

 

The counter has generated total returns that have far surpassed that of the STI so far this year

 

[SINGAPORE] With demand for foreign workers continuing to outpace the supply of dormitory spaces, Centurion Corporation : OU8 0% is ramping up capacity and exploring asset monetisation, making it a small-cap property play to watch.

 

This is according to RHB Bank Singapore, which highlighted Centurion as one of its top stock picks for 2025 among companies with small market capitalisation. Centurion was featured in RHB&rsquo s Singapore Small Cap Jewels 2025, published on May 16.

 

The bullish sentiment is echoed by analysts from Maybank Securities and Phillip Securities Research, who cited favourable demand-supply dynamics and a robust pipeline of expansion projects across key markets. 

 

Headquartered in Singapore, Centurion operates purpose-built worker accommodation (PBWA) in Singapore and Malaysia, and student housing in Australia, the UK, and the US.

 

Phillip Securities analyst Yik Ban Chong noted that the group&rsquo s first-quarter FY2025 revenue rose 13 per cent year-on-year to S$69 million, driven by higher rental rates for its Singapore dormitories. 

 

Contributing to this growth, said Yik, was the ramp-up of new capacity, including a 1,650-bed facility at Westlite Ubi, which became operational in late 2024 and has already reached near-full occupancy.

 

Meanwhile, RHB Singapore&rsquo s head of small-mid cap research Alfie Yeo said in a separate May 23 note that he anticipates Centurion&rsquo s earnings to rise by 4 per cent annually for FY2025 and FY2026, and 5 per cent for FY2027, on the back of stronger-than-expected bed rates and occupancy levels across its PBWA and student housing segments. 

 

While concerns linger over US-led reciprocal tariffs, Maybank analysts Eric Ong and Jarick Seet pointed out that Centurion expects minimal disruption to its business operations. 

 

They highlighted a clear capacity expansion roadmap for 2025&ndash 2026 spanning Singapore, Malaysia and Australia, aimed at striking a &ldquo strategic balance between occupancy levels and rental rate growth&rdquo .

 

Undemanding valuation

Looking ahead, RHB&rsquo s Yeo pointed to Centurion&rsquo s ongoing capacity expansion and asset monetisation plans as key reasons for its positive outlook.

 

For instance, he said in the Singapore Small Cap Jewels report that the total number of revenue-contributing beds for FY2025, he said, is expected to grow by 5.3 per cent year-on-year to 73,000, and it will be supported by Singapore&rsquo s new Westlite Ubi Ave 3 and Malaysia&rsquo s Westlite Johor Tech Park

 

Centurion has also expanded into Hong Kong and China. 

 

In FY2024, the group entered these markets through two majority-owned partnerships. In China, it will manage and operate build-to-rent properties comprising around 1,500 residential apartments, targeted at fresh graduates and working professionals. 

 

In Hong Kong, it entered the worker housing market with Westlite Sheung Shui, a 539-bed facility catering to foreign workers in sectors such as food and beverage and services.

 

More value could be unlocked over the mid to longer term, Yeo said. Centurion has previously monetised assets through sale-and-leaseback deals in Malaysia, and is now exploring a potential Reit (real estate investment trust) listing involving some of its student and worker accommodations.

 

While still at an exploratory stage, Yeo said that the move is aimed at supporting growth, shifting to an asset-light model, and generating fee-based income. RHB also flagged the possibility of special dividends, depending on how any proceeds are used.

 

Centurion&rsquo s net gearing stood at 0.4 times in FY2024, and the business has generated over S$75 million in operating cash flow annually for the past five years, according to RHB. 

 

While it uses debt to fund property developments, the group has remained cash-generative, said Yeo. He also noted that Centurion typically pays a sustainable dividend, with a payout of S$0.025 per share in FY2023, representing around 30 per cent of earnings. 

 

This payout ratio is expected to be maintained, with occasional special dividends possible if more assets are unlocked and excess cash is not reinvested, said Yeo. 

 

Still, Yeo cautioned that RHB&rsquo s earnings forecasts are premised on stronger occupancy and improved bed rates at Centurion&rsquo s student accommodation assets. 

 

Any shortfall in these areas could pose downside risks to its estimates, he added. 

 

That said, Yeo said that Centurion remains a leading dormitory operator in Singapore, where a shortage of beds continues to support both occupancy and rental growth. 

 

With opportunities for further capacity expansion, he added that the stock is trading at an &ldquo undemanding valuation&rdquo of nine times FY2025 forecast earnings, and offers a dividend yield of around 3 per cent. 

 

RHB has set a target price of S$1.50 for shares of Centurion &ndash implying a potential upside of 11.9 per cent from its closing price of S$1.34 on Friday (May 23).

 

In the year to date, the counter has generated a total return &ndash with dividends reinvested &ndash of 41.8 per cent.

 

In comparison, the benchmark Straits Times Index has a total return of 5 per cent over the same period.

 

Centurion Corporation has reported a 13% y-o-y revenue growth for 1QFY2025 ended March 31, 2025 of $69.05 million.

 

This was driven by positive rental reversions across markets and occupancies in Singapore and the UK.

 

Revenue for the group&rsquo s purpose-built worker accommodation (PBWA) segment grew 15% to $53.4 million in 1QFY2025 &mdash in Singapore, average occupancy remained at 99%, excluding Westlite Ubi which became operational in December. Including Westlite Ubi, the group&rsquo s average financial occupancy for Singapore stood at 98%.

 

In Malaysia, group revenue for the PBWA segment declined marginally by 1% due to decline in financial occupancy but offset by positive rental revisions and a stronger Malaysian currency.

 

The average financial occupancy, excluding beds newly added from asset enhancement initiatives (AEIs), reduced to 82% in 1QFY2025, from 96% in 1QFY2024.

 

This is due to the foreign worker cap, which has hindered employers from recruiting new workers. However, due to labour shortages, business owners have called for a relaxation of the current restrictions.

 

In Hong Kong, Westlite Sheung Shui which became operational in November 2024, achieved financial occupancy of 25% for 1QFY2025.

 

In its purpose-built student accommodation (PBSA) portfolio segment, revenue grew 2% y-o-y. In the UK, its revenue increased 6% y-o-y in 1QFY2025 due to positive demand-supply dynamics which is driven by the ongoing bed shortage. Financial occupancy fell slightly to 97%.

 

In Australia, revenue saw a 7% y-o-y decrease due to a weaker Australian dollar which resulted in negative currency translation impact. Average financial occupancy declined slightly to 86%, and Centurion observed a delay in student arrivals for the academic year 2025 due to international student visa management measures.

 

Its built-to-rent segment saw an average financial occupancy of 48% in the quarter.

UOB Kay Hian analyst Adrian Loh has raised his target price on Centurion Corporation to $1.48 from $1.16 previously as the stock is deemed as a &ldquo safe harbour&rdquo amid US President Donald Trump&rsquo s &ldquo tragic tariffs&rdquo .

 

&ldquo Centurion remains a key stock for investors in turbulent times, in our view,&rdquo Loh writes in his April 14 report.

 

The analyst, who has kept his &ldquo buy&rdquo call on Centurion, believes that the company&rsquo s business model of purpose-built workers&rsquo accommodation (PBWA) and purpose-built students&rsquo accommodation (PBSA), will insulate its revenues and profitability from externally-caused shocks brought on by the tariffs.

 

Centurion&rsquo s PBWA assets are likely to benefit from the robust construction demand in Singapore&rsquo s public and private sectors, says Loh. In FY2024, the company reported $124 million in revenue, of which nearly 70% came from Singapore and its PBWA assets.

 

&ldquo Construction activity from both the public and private sectors remains high with key multi-year projects such as the Marina Bay Sands expansion (worth $10.7 billion), Resorts World Sentosa expansion ($6.8 billion), Changi Airport Terminal 5 ($11.0 billion), and the 21.5km North-South Corridor linking Woodlands to the western end of the East Coast Parkway ($7.5 billion),&rdquo the analyst notes.

 

The proposed Johor-Singapore special economic zone (JS-SEZ) could also lead to additional demand for Centurion&rsquo s PBWA assets in Malaysia, which made up 8% of the company&rsquo s FY2024 revenue.

 

&ldquo At present, we forecast 870 new beds that will be completed by end-2025, with contribution only starting in 2026. In prior conversations with management, they were clearly bullish on the PBWA sector in Malaysia and thus we should expect potential acquisition announcements in the near to medium term,&rdquo Loh writes.

 

The analyst adds that he remains bullish on Centurion&rsquo s PBWA business as it is likely for meaningful competition to happen in the near to medium term given that it takes 24 months or more for a potential competitor to tender for and build a PBWA facility.

 

At the same time, expenditure for education remains inelastic, which will impact Centurion&rsquo s PBSA assets in Australia and the UK.

 

&lsquo Inexpensive stock&rsquo

 

At its present share price levels, Centurion, which is trading at an FY2025 P/E of 9.5 times and P/B of 0.8 times, is &ldquo inexpensive&rdquo in Loh&rsquo s view.

 

The analyst&rsquo s higher P/E-based target price is due to a higher target P/E multiple of 10.6 times, which is 1 standard deviation (s.d.) over Centurion&rsquo s long-term average P/E multiple of 6.9 times. The figure excludes FY2019, when the business was affected by Covid-19.

 

&ldquo We highlight that our target P/E multiple is applied to the average of our FY2025 and FY2026 earnings per share (EPS) estimates to account for the earnings growth from its projects in FY2026,&rdquo says Loh. &ldquo We believe that this target P/E multiple is undemanding given the company&rsquo s earnings growth over the next two years.&rdquo

 

The analyst&rsquo s forecast payout ratio for FY2025 remains at an unchanged 30%. This implies an estimated dividend of 3.5 cents per share or a yield of 3.1% based on Centurion&rsquo s closing share price of $1.12 as at April 11.

 

Other factors in Centurion&rsquo s favour is its strengthening balance sheet. As at Dec 31, 2024, Centurion&rsquo s net debt fell by 8% to $534 million compared to a year ago, resulting in a lower net debt/equity of 0.3 times, down from FY2023&rsquo s 0.4 times.

 

&ldquo In our view, its average long-term debt maturity profile remains comfortable at six years while interest coverage ratio improved to 4.4 times (end-2023: 3.6 times),&rdquo Loh writes.

 

The company&rsquo s proposed REIT spin-off of its PBWA and PBSA assets as well as its subsequent dividend in specie is a share price catalyst.

 

Other catalysts include successful capital recycling efforts or capacity expansions involving joint ventures which could result in a more asset-light business model that requires less capital intensity.

On Apr 7, Centurion Corp&rsquo s non-executive director and joint chairman Han Seng Juan increased his total interest in the company from 55.68 per cent to 55.71 per cent. He bought 250,000 shares for a consideration of S$260,000, which translates to an average price of S$1.04 a share.

 

His preceding acquisitions were in February, with 600,000 bought at S$0.977 a share, and in August 2020, with 1,525,000 shares purchased at S$0.352 apiece. Responsible for the formulation of corporate and business strategies, he has also been a principal and director of Centurion Global, a controlling shareholder of the company, since April 2008.

 

Maybank Securities analysts Eric Ong and Jarick Seet have initiated coverage on worker and student dormitory operator Centurion Corporation at a target price (TP) of $1.45. 

 

They note that despite the share price&rsquo s outperformance, the current valuation of the stock&rsquo s around 10 times forward price-to-earnings ratio (P/E) is &ldquo not too excessive&rdquo , thanks to recurring earnings visibility from robust construction-driven demand in Singapore and a clear pipeline of capacity expansion.

 

Ong and Seet write in their Mar 28 report: &ldquo In 2Q2025, about 9,000 dormitory beds will be taken out of local supply as the lease to operate one of the larger dorms by its competitor will not be renewed.&rdquo

 

Centurion&rsquo s management also anticipates a further supply squeeze by 2027, when dorms must meet upgraded interim standards under the MoM&rsquo s Dormitory Transition Scheme (DTS). 

 

With this, the analysts see that the group&rsquo s dorms at Westlite Toh Guan and Westlite Mandai can serve as &lsquo swing sites&rsquo during such transition shifts. 

 

Meanwhile, the group also has plans to develop some 7,000 beds in Malaysia including Nusajaya, Iskandar and Johor, to which Ong and Seet note could potentially benefit from the set-up of the Johor-Singapore special economic zone (JS-SEZ).

 

On Centurion&rsquo s student accommodation portfolio, there are plans for expansion in Australia and the UK. 

 

&ldquo Universities in the UK are growing their international student numbers, which should spur demand. In Australia, there is also an ongoing shortage of beds and the group is looking to further increase its bed count in Melbourne and Sydney,&rdquo write Ong and Seet.

 

The group has also established two joint-ventures (JVs) for built-to-rent (BTR) projects in Xiamen, China. These JVs follow a property development model where buildings are specifically constructed or retrofitted for long-term rental accommodation purposes.

 

Overall, the analysts see that the demand-supply dynamics in the specialised accommodation sector continue to support positive rental rate revisions for Centurion. The group is also seeking scalable growth via JVs and an asset-light strategy, as well as selectively growing its portfolio through accretive mergers and acquisitions (M& As) in existing and new markets. 

 

They conclude: &ldquo Additionally, the group is exploring a transaction involving the establishment of a REIT and also considering to effect a dividend in specie of some of the units in the proposed trust to reward shareholders.&rdquo

 

Upside factors noted by them include better-than-expected financial occupancy, rental rate reversion for the group&rsquo s accommodation assets, potential capital recycling exercises to generate higher returns and lastly, the aforementioned portfolio expansion via asset-light strategy in existing and new markets. Conversely, downsides include an oversupply of beds resulting in higher vacancy rates, lower-than-expected margins from intense competition and finally, a deterioration in the macroeconomic environment.

On Mar 27, Centurion Corporation executive director and joint chairman David Loh acquired 100,000 shares via a market transaction at S$1.19 a share. This increased his direct stake from 9.12 per cent to 9.13 per cent. His total interest in the specialised accommodation developer and manager is now 59.79 per cent, with deemed interests mostly through his 50 per cent shareholding interest in Centurion Global. 

In January, the group said it is exploring the establishment of a Reit, which is expected to do the heavy lifting as it focuses on becoming asset-light

 

[SINGAPORE] Shares of purpose-built accommodation operator Centurion : OU8 +5.5% advanced amid a surge in trading volumes on Wednesday (Mar 19) morning.

 

As at 11.54 am, the counter climbed 4.6 per cent or S$0.05 to S$1.14 &ndash a 52-week high, after close to 1.7 million shares changed hands. 

 

On Feb 26, the group reported a net profit of S$226.6 million for the six months ended Dec 31, 2024, a 97 per cent jump from S$114.8 million in the year-ago period.

 

This was attributed to a net fair-value gain of S$157.5 million in the second half.

 

Revenue for H2 stood at S$129.2 million, 18 per cent higher than the S$109.3 million in the year before.

 

For the full year, revenue jumped 22 per cent to S$253.6 million from S$207.2 million previously. Net profit stood at S$344.8 million, from S$153.1 million in 2023. 

 

This translated into earnings per share of S$0.4101, up from S$0.1821. 

 

The group declared a final dividend of S$0.02 per share, up from S$0.015 in the previous year.

 

In January, Centurion said it is exploring the establishment of a real estate investment trust (Reit) comprising some of its workers and student accommodation assets.

 

If the plan materialises, the Reit will be listed on the mainboard of the Singapore Exchange.

 

Centurion noted in its results briefing in February that the proposed Reit will do &ldquo the heavy lifting&rdquo as the group focuses on becoming asset-light.

 

Its chief executive Kong Chee Min said that the group has been aiming to grow its assets under management for some time, but does not need to hold on to the properties.

 

While he did not divulge details on the Reit&rsquo s make-up, he noted that it will be of a &ldquo reasonable size&rdquo , and feature mainly &ldquo stabilised assets&rdquo .

On Feb 27, Centurion Corporation non-executive director and joint chairman Han Seng Juan increased his total interest in the company from 55.61 per cent to 55.68 per cent. He bought 600,000 shares for a consideration of S$586,338, translating to an average price of S$0.977 per share.

 

His preceding acquisitions were in August 2020, with 1,525,000 shares purchased at S$0.352 apiece.

 

Responsible for the formulation of corporate and business strategies, he has also been a principal and director of Centurion Global, a controlling shareholder of the company, since April 2008.

 

The group owns and manages a portfolio of 37 operational accommodation assets totalling 69,929 beds as at Dec 31.

 

Its FY2024 attributable net profit surged by 125 per cent to S$344.8 million, with core business net profit rising 45 per cent to S$110.8 million.

 

Significant fair value gains on investment properties contributed to the robust financial performance. Additionally, Centurion Corporation maintained a healthy balance sheet with S$89 million in cash and bank balances, and a net gearing ratio of 29 per cent.

Due to increased rental and occupancy rates at its dormitories, Centurion Corporation &rsquo s revenue for the financial year ended Dec 31, 2024, rose by 22% y-o-y to $253.6 million. Boosted by fair value gains, earnings surged 125% y-o-y to $344.8 million. If this item was excluded, net profit attributed to equity holders rose by 43% y-o-y to $99.3 million. Centurion plans to pay a final dividend of 2 cents per share, bringing the FY2024 total to 3.5 cents versus 2.5 cents in FY2023.

 

With a bigger volume of construction projects, Centurion expects the demand-supply dynamics of its so-called purpose-built workers&rsquo accommodation to be &ldquo very positive&rdquo . The government projects total construction demand for 2025 to range between $47 billion and $53 billion, up from $44.2 billion in 2024 and $33.8 billion in 2023. 

 

Under local requirements, work permit holders employed in the construction, marine and process sectors must be housed in approved dormitories. For Centurion, this is an addressable market of some 443,000 workers.

 

At the same time, another 400,000 work permit holders are employed in other sectors. They can be housed in alternative accommodations such as flats, apartments and other converted spaces. According to David Phey, Centurion&rsquo s head of corporate communications, workers&rsquo dorms are still preferred, especially if rental rates for these alternative spaces are high.

 

Centurion believes that with 244,000 beds in purpose-built dorms and another 190,000 beds in other spaces, demand can now be met. However, some 9,000 beds will be taken out of the supply in 2Q2025 as the lease to operate one of the larger dorms by another competitor won&rsquo t be renewed.

 

Centurion anticipates a further supply squeeze by 2027, as dorms must meet upgraded interim standards under the Ministry of Manpower&rsquo s Dormitory Transition Scheme (DTS).

 

As Centurion is redeveloping its dorms and adding beds ahead of the transition scheme, these dorms, particularly Westlite Toh Guan and Westlite Mandai, will serve as &ldquo swing sites&rdquo when shifts are required. Its quick-build dormitories (QBDs) already meet the new dormitory specifications. Thus, Centurion doesn&rsquo t expect its revenue to be interrupted by the DTS.

 

With the government stepping in to manage supply, Centurion expects rental rate growth to slow compared to the past 18 months. Even then, its revenue is expected to grow as most of its leases are on one-year terms and can thus be renewed at prevailing rates without any cap on the pace of rental reversion, Phey notes.

 

In Malaysia, Centurion plans to develop some 7,000 beds in Nusajaya, Iskandar, and Johor. Its nascent presence in Hong Kong enjoys &ldquo good growing demand&rdquo from workers from the Mainland.

 

Centurion has a portfolio of student accommodations in Australia, the UK and the US. Similar to the workers&rsquo dorm, Centurion enjoyed both higher occupancy and rental rates, as this is an asset class with strong demand and short supply, whetting a bigger appetite from institutional investors, says Phey.

 

Universities in the UK are growing their international student numbers, which will lead to more demand. In Australia, there is also an ongoing shortage of beds. As such, Centurion wants to expand its bed count in Melbourne and Sydney, he adds. The company is also looking for related opportunities in Hong Kong, which is keen to be an international post-secondary education hub.

 

Spin-off REIT listing

 

Centurion is eyeing expansion in its so-called build-to-rent (BTR) accommodation as well. It has an agreement with a local partner in Xiamen to provide housing for working professionals. &ldquo The expansion aligns with China' s regulatory push to increase bank financing for rental housing projects, supporting the growth of affordable and commercial rental supply across major cities,&rdquo says Centurion in its presentation.

 

In January, Centurion announced plans to spin off a REIT &mdash 10 years after it had wanted to do so. When asked, CEO Kong Chee Min felt that now is &ldquo the right time to do so.&rdquo As of Dec 31, 2024, Centurion has $2.5 billion worth of assets under management (AUM) with 69,929 beds and 37 properties in six countries.

 

Centurion indicates the REIT will be of a &ldquo reasonable size and will be a reflection of the company&rsquo s significant asset growth since 2015. &ldquo While the type of asset that Centurion is able to offer is a key differentiating factor, we point to the fact that the Singapore REIT industry is extremely crowded, and a mid-sized REIT could struggle for investors&rsquo attention,&rdquo says Adrian Loh of UOB Kay Hian in his March 6 note.

 

Nonetheless, Loh has not only maintained his &ldquo buy&rdquo call on Centurion but has also raised his target price to $1.16 from $1.11, using a higher valuation of 8.7 times from 6.9 times.

 

Alfie Yeo of RHB Bank Singapore is similarly bullish, indicating a " buy" call and $1.17 target price in his March 5 note. " We turn more positive in our FY2025 to FY2026 outlook due to its higher earnings base of FY2024 and increased bed capacity.&rdquo