Analysts from UOB Kay Hian Research and CGS-CIMB Research have maintained their &ldquo buy&rdquo and &ldquo add&rdquo ratings on Centurion Corporation 

OU8 0.00% with increased target prices of 50 cents and 60 cents, up from 43 cents and 58 cents, respectively.

 

In his report dated Aug 15, Adrian Loh of UOB Kay Hian says that Centurion&rsquo s strong 1HFY2023 ended June 30 revenue and patmi of $98 million and $38 million, up 8% and 16% y-o-y, came in line with expectations.

 

One of the largest providers of purpose-built workers' accommodation (PBWA) in Singapore and Malaysia, the company saw a 4.6 percentage point expansion in gross profit margin to nearly 72%, due to strong occupancies and positive rental revisions across all of its asset classes, which also includes purpose-built student accommodation (PBSA) in Australia, the UK and the US.

 

Revenue and patmi for the period formed 52% and 59%, respectively, of Loh&rsquo s full-year estimates, and an interim dividend of 1 cent per share was declared compared to 0.5 cents in 1HFY2022, implying 2.3% yield.

 

The analyst says this robust performance was driven by strong occupancies and positive rental revisions across both of Centurion&rsquo s PBWA and PBSA segments which were able to cushion the impact of higher interest rates. Both segments performed well in 1HFY2023 with profit growths of 21% and 17% y-o-y, respectively.

 

Occupancy rates for PBWA in Singapore and Malaysia were strong at 98% and 94% respectively, while PBSA also had a significant occupancy increase, with Australia in particular witnessing a marked improvement to 86% in 1HFY2023 from 58% the year before, when Covid-related travel restrictions were not yet fully lifted.

 

The lifting of Covid-related restrictions has also created an increase in the migrant worker population to address deferred projects during the pandemic. This has resulted in supply and demand imbalances which have driven high occupancy rates for PBWAs of 98% in Singapore and 94% in Malaysia, up from 70% in 2021, adds Loh.

 

He notes that the positive rental rate reversions that began in 4QFY2022 will continue to be priced into new leases expiring over the next few quarters.

 

Meanwhile, Singapore&rsquo s Ministry of Manpower reported 434,000 foreign workers in Singapore as of May, which is in excess of the supply of 401,000 beds. &ldquo As a result, Cent believes that it may take until 2025 for new PBWAs to cater to demand, assuming that demand remains static. Channel checks with dormitory users indicate that they are prepared for 8% to 10% rental reversions in the near to medium term,&rdquo the analyst says.

 

Loh adds: &ldquo The better-than-expected numbers were driven by better metrics across Singapore, Malaysia and Australia, and more importantly, were able to demonstrate Centurion&rsquo s ability to increase rentals to cushion the impact of higher finance expenses.&rdquo

 

Meanwhile, there is a healthy pipeline of new PBWA contracts and expanding bed capacities, such as a 10-year management contract for Westlite Cemerlang in Johor, Malaysia with a 2,196-bed PBWA to commence operations in 4Q23. Centurion also intends to continue to enlarge its portfolio bed capacity in Johor, with another 1,060 beds by 3Q23 and 2,720 beds by 2024.

 

In Singapore, Centurion was also awarded a JTC tender to develop and operate a new Purpose Built Dormitory starting from 2025. &ldquo The company appears to have high expectations for occupancy rates due to a shortage of quality bed supply in East Singapore,&rdquo says Loh. &ldquo Going forward, we expect Centurion to continue to see strong volume and rental growth with a strong pipeline of new contracts and robust demand.&rdquo

 

The UOB Kay Hian analyst&rsquo s target price-to-earnings ratio (P/E) has been upgraded to 6.1x, which is 1.5 standard deviations (s.d.) above the company&rsquo s average P/E multiple since 2020, and has been applied to his FY2024 earnings per share (EPS) estimate. As such, he has raised his target price to 60 cents. &ldquo In our view, our prior target P/E multiple of 5.8x, or 1s.d. above Centurion&rsquo s mean P/E, is an inadequate reflection of the company&rsquo s ability to continue to deliver earnings growth out to 2025.&rdquo

 

&ldquo In addition, we believe that the company&rsquo s current metrics are inexpensive, trading at FY2023 P/E of 5.3x and 0.5x price-to-book value (P/Bv). Year-to-date, Centurion&rsquo s share price has easily outperformed the STI&rsquo s -0.1% return and we expect continued outperformance in the next 12 months,&rdquo Loh adds.

 

Meanwhile, Ong Khang Chuen and William Tng of CGS-CIMB are also positive on Centurion&rsquo s results. They have raised their FY2023 to FY2025 EPS by 3.3% to 6.4% on higher rental rate assumptions, which has lifted their blended target price to 60 cents.

 

Similar to UOB Kay Hian&rsquo s Loh, they believe Centurion&rsquo s valuation is undemanding at 5.1x FY2024F P/E, or a 53% discount to its revalued net asset value (RNAV).

 

Emphasising further rental growth that will arise from the tight PBWA supply in Singapore, Ong and Tng note that Centurion is actively bidding for new leases in the country across dormitory types, such as quick build dormitory (QBD) purpose-built dorms and healthcare worker hostels.

 

Post-asset enhancement initiatives (AEIs in the PBSA segment, they expect Centurion&rsquo s PBSA&rsquo s financial occupancy to further recover to 94% and 85% in the UK and Australia for FY2024, compared to 90% and 80% last year. Rents could grow by another 10% to 15% in the upcoming academic year, they add.

 

The CGS-CIMB analysts re-rating catalysts include the gradual resumption of Centurion&rsquo s dividend payout ratio (DPR) to pre-pandemic levels of 40% to 50% and the successful execution of its capital recycling strategy. Meanwhile, downside risks include a higher-than-expected increase in financing costs, and a slowdown in the construction and oil and gas sectors, which would impact worker requirements.

 

MAINBOARD-LISTED dormitory operator Centurion Corporation : OU8 -2.22% has benefited from tight supply conditions, amid a shortage of worker accommodation in Singapore.

 

Still, it intends to bid competitively to continue to grow its portfolio, said the group&rsquo s chief executive Kong Chee Min at a briefing on Friday (Aug 11), a day after the company announced its results for the first half ended June.

 

Centurion&rsquo s net profit grew 16 per cent year-on-year (y-o-y) to S$38.3 million in H1, while revenue rose 8 per cent to S$97.9 million.

 

Gross profit margin climbed five percentage points to 72 per cent, and net profit margin rose one percentage point to 37 per cent.

 

While he declined to give specific rental figures, Kong noted that the company&rsquo s rents were broadly tracking figures observed by the Ministry of Manpower.

 

In a parliamentary reply in July, Manpower Minister Tan See Leng said the ministry had observed a 50 per cent increase in rental rates from pre-pandemic rates in the first quarter of this year to about S$420 per worker per month.

 

Furthermore, Kong said, the current set of financial results are still &ldquo far from&rdquo reflecting the full potential increase in rental rates, as the company started raising rates only in October, when rates were not as high.

 

However, Kong said, the company continues to strike a balance between shareholder returns and doing business on a longer-term basis. He added that Centurion does not set rents at the market rate for its existing clients.

 

&ldquo Of course we can ask for S$500, and they have no choice but to pay, as some other operators (have done). But we don&rsquo t do that,&rdquo he said.

 

At the same time, he believes that clients are reasonable and will accept increases as market rates have risen.

 

Centurion is also optimistic that the leases on its current quick build dormitories (QBDs) will be extended as supply remains tight.

 

QBDs are temporary structures built during the pandemic to create additional bed space for migrant workers.

 

Kong said that if the government does not need to repurpose the land that the QBDs are built on, he expects that their leases to continue to be extended. The company&rsquo s QBDs are located in Kranji, Jurong and Tuas.

 

The company currently operates four QBDs with a total of 7,256 beds. Their leases expire between 2024 and 2025.

 

These dormitories account for 20.9 per cent of the total bed capacity that the company has in Singapore.

 

Despite the tight supply situation now, Kong said that the post-pandemic influx of foreign workers into Singapore may not be sustainable.

 

As at May 2023, the Manpower Ministry said that there were 434,000 foreign work permit holders in the construction, marine and process (CMP) sectors.

 

He also noted that the government is pushing for contractors to open Construction Temporary Quarters (CTQs), which are on-site temporary dormitories where workers can stay.

 

&ldquo This (foreign worker) population that they are bringing in is actually a post-pandemic syndrome because of a lot of projects are lagging,&rdquo he said.

 

Kong added that as the government releases more bed capacity for tender, the company will not compromise profits, even as it seeks to bid competitively for these projects.

 

&ldquo We are more focused on whether we are able to profit from it, rather than tender for the sake of tendering, and the risk associated (with) particularly those shorter-term leases,&rdquo he said.

 

Aside from new project tenders in the CMP sectors, Centurion is also looking to diversify its clientele even further.

 

For instance, it is in the process of understanding the specifications for the new hostel-like accommodations that the Ministry of Health and MOH Holdings announced on Monday.

 

The accommodations are meant to house foreign healthcare workers, and are expected to house a total of 1,800 workers.

 

Work on the facilities is expected to start at the end of this year, and be progressively ready from the second quarter of 2024.

 

Chief operating officer Kelvin Teo said: &ldquo It is a very different set of (specifications) &ndash between workers and student co-living &ndash so it&rsquo s a good (project) that we want to add on to our portfolio.&rdquo

 

SPECIALISED accommodation assets player Centurion Corporation : OU8 0% on Thursday (Aug 10) announced earnings of S$38.3 million for the first half of its 2023 financial year, up 16 per cent from S$32.9 million in the year-ago period.

 

Earnings from its core business operations &ndash excluding fair-value adjustments &ndash stood at S$36 million in the latest half-year ended Jun 30, representing an 11 per cent increase from S$32.4 million a year ago. 

 

Centurion&rsquo s H1 2023 revenue rose 8 per cent year on year to S$97.9 million from S$90.5 million. The group attributed this to stronger demand for workers&rsquo accommodation and student accommodation across Singapore, Malaysia and Australia.

 

The group noted, for instance, that financial occupancy for its purpose-built workers&rsquo accommodation (PBWA) portfolio grew to 96 per cent in H1 2023, from 86 per cent in the same period in 2022. Financial occupancy for its PBWA in Singapore &ndash which comprises five purpose-built dormitories and four quick-build dormitories &ndash also recovered to pre-pandemic levels at 98 per cent, supported by positive rental rate revisions.

 

Revenue in the city-state consequently rose 4.6 per cent to S$63.8 million, from S$61 million in H1 2022. 

 

Overall, revenue from Centurion&rsquo s workers&rsquo accommodation portfolio grew 9.5 per cent to S$73.3 million for the latest half-year, from S$67 million in H1 2022. This came in tandem with the easing of border restrictions post-pandemic, the group said. 

 

Meanwhile, revenue from the group&rsquo s student accommodation portfolio increased by 7.7 per cent to S$24.3 million, from S$22.5 million in the year-ago period. It said this was largely due to a &ldquo strong occupancy rebound&rdquo in its Australian purpose-built student accommodation assets this was in turn driven by the return of international students. 

 

Centurion said it expects this growth will continue, with &ldquo notable growth&rdquo in Chinese student numbers following Beijing&rsquo s move to end the recognition of online degrees. 

 

Earnings per share stood at S$0.0456 for H1 2023, up 17 per cent from S$0.0391 in the same period a year ago. 

 

The group&rsquo s board declared an interim dividend of S$0.01 per ordinary share, which it said will be paid on Sep 29, 2023.

 

&ldquo We are mindful of the economic uncertainties arising from headwinds such as high, rising interest rates and inflation, but remain confident that Centurion&rsquo s portfolio of assets will continue to do well,&rdquo said the group&rsquo s chief executive officer Kong Chee Min.

 

&ldquo Our interim results reflect the resilience of our core business, and the group will continue to strategically review our assets, enhance our portfolio and expand revenue streams to deliver sustainable value to our stakeholders.&rdquo  

 

SHARES of worker and student accommodation provider Centurion Corporation : OU8 +7.5% rose by as much as 10 per cent on higher-than-usual volume on Monday (Jul 17), after CGS-CIMB initiated coverage on the stock with an &ldquo add&rdquo call.

 

Its shares hit S$0.44 &ndash a three-year high &ndash just before the midday trading break. The last time its share price closed near this level was on May 6, 2020.

 

Its trading volume of 4.9 million shares at the trading break was also well above its average trading volume of 234,898.

 

No married deals were recorded at the time, based on ShareInvestor data.

 

After the market reopened, the stock fell slightly to S$0.435 as at 2pm. It closed the day at S$0.43, up S$0.03 or 7.5 per cent.

 

On Friday, CGS-CIMB had initiated coverage on Centurion Corporation with a target price of S$0.58. It expects the group to see strong demand recovery, now that global borders have reopened.

 

Centurion is also expected to benefit from the ongoing undersupply of beds across its operating geographies, regulatory reforms for purpose-built worker accommodations (PBWA) and growing awareness for migrant worker welfare, the research house said.

 

&ldquo We believe the supply tightness in Singapore will persist in the medium term, given the government&rsquo s intention to progressively de-densify existing PBWA,&rdquo said CGS-CIMB analysts Ong Khang Chuen and William Tng.

 

New supply will enter the market progressively only in 2025, they added.

 

There is therefore a good chance Centurion&rsquo s quick-build dormitories (QBDs) would have their leases extended. The QBDs were part of the Singapore government&rsquo s temporary solution to meet housing requirements for migrant workers during the pandemic.

 

On the student accommodation front, the return of Chinese students to most international markets should boost Centurion&rsquo s occupancy rates and income.

 

The analysts also see the dormitory operator&rsquo s valuation as &ldquo undemanding&rdquo , given that it trades at 4.9 times&rsquo estimated earnings for FY2024, and a 57 per cent discount to its revalued net asset value (RNAV).

 

Centurion&rsquo s target price is based on a blended valuation of earnings and RNAV, which they said better reflects the company&rsquo s &ldquo strong near-term earnings potential&rdquo and its possible asset recycling in Malaysia.

CENTURION Corporation, which owns, develops and manages purpose-built worker and student accommodation, has applied to voluntarily withdraw its shares listing on the Hong Kong stock exchange (HKEX) &ldquo for reasons of cost and utility&rdquo .

 

In a bourse filing on Monday (Jun 5), the company, which is listed on the Singapore Exchange&rsquo s mainboard, said the volume of trading since its 2017 share offer on the HKEX has been &ldquo very limited&rdquo .

 

The company also has not had the appropriate opportunity to take advantage of HKEX platform for secondary equity fund-raising activities in Hong Kong, it noted.

 

However, maintaining the listing of the shares there requires additional ongoing regulatory compliance obligations and such requirements involve additional costs and administrative burden, it said.

 

Notwithstanding the proposed delisting in Hong Kong, Centurion explicitly stated its intention to retain the existing primary listing of its shares on the Singapore Exchange following the proposed delisting.

 

As a next step, an extraordinary general meeting will be called to seek shareholders&rsquo approval for the proposed delisting, it said.

 

Centurion, meanwhile, noted that its directors do not expect that the proposal&rsquo s implementation will cause a diminution in the net asset value or earnings per share of the company neither would it adversely affect the business of the group.

 

It reiterated that it would, rather, enable the company to effect cost savings.

PROPERTY player Centurion&rsquo s revenue rose to S$47.1 million for the first quarter ended Mar 31 from S$45.1 million the year before.

 

This was mainly driven by increases in occupancies and positive rental revisions across its purpose-built workers&rsquo accommodation (PBWA) in Singapore and Malaysia, and its purpose-built student accommodation (PBSA) in Australia, the group said in a business update on Wednesday (May 10) night.

 

Revenue from the PBSA segment grew 6.9 per cent to S$11.7 million, from S$11 million in the year-ago period revenue from the PBWA segment grew 5.4 per cent to S$35.2 million, from S$33.4 million the previous year.

 

The group, which owns, develops and manages specialised accommodation assets, said financial occupancies for its Singapore PBWA portfolio have fully recovered to pre-pandemic levels, supported by positive reversion of rental rates. The portfolio consists of five purpose-built dormitories and four quick-build dormitories.

 

Financial occupancies in the purpose-built dormitories in Singapore rose to 98 per cent in Q1, from 95 per cent in the year-ago period the quick-build dormitories maintained &ldquo close to full occupancy&rdquo in the first quarter. (Financial occupancy is defined as the percentage of total gross leasable area for which a tenant is obligated to pay rent under the terms of its lease agreement this is regardless of the actual use or occupation of the space by that tenant.)

 

Even so, revenue generated by the Singapore assets fell slightly to S$30.5 million from S$30.6 million, as two migrant worker onboard centres which the group managed stopped operations last September.

 

In Malaysia, financial occupancy at the group&rsquo s PBWAs recovered to 93 per cent in Q1, from 68 per cent the previous year, due to the inflow of new workers with the easing of border restrictions.

 

Revenue rose 43.8 per cent to S$4.9 million from S$3.4 million previously.

 

In Australia, average financial occupancy for the group&rsquo s two assets in Adelaide and Melbourne improved to 80 per cent in the first quarter, from 49 per cent the previous year, on the return of international students.

 

Revenue from the Australian PBSA grew to S$3.2 million from S$1.8 million, boosted by healthy rental reversions.

 

&ldquo We are pleased to have started the year with improvements in revenue across our global portfolio, with the growth of student and worker populations across the countries where Centurion operates,&rdquo said Kong Chee Min, Centurion&rsquo s chief executive.

 

&ldquo At the same time, we are mindful of continued macroeconomic challenges such as inflationary pressures and rising interest rates, which may impact our business and performance. We will monitor these developments with prudent financial management,&rdquo he added.

PROPERTY player Centurion Corporation : OU8 +2.82% is disposing of a property in Seoul, South Korea, for a consideration of 21.3 billion won (S$21.5 million).

 

The disposal is being carried out as part of a rationalisation of Centurion&rsquo s asset portfolio, it said on Monday (Apr 10). It added that it intends to &ldquo align and focus&rdquo its asset portfolio, on countries where it believes it can &ldquo expand and scale up its operations&rdquo .

 

The property, located at 188-5 Hoegi-ro, Dongdaemun-gu, is owned by the group&rsquo s joint venture, IGIS Centurion No 238 Professional Investors Private Real Estate Investment (REF).

 

Centurion&rsquo s wholly-owned subsidiary, Centurion Overseas Investments (COI), holds a 55 per cent stake in REF and a 55 per cent stake in CSL Student Living Benikea. These represent the group&rsquo s asset holdings in South Korea.

 

REF entered into a sale and purchase agreement with Ganghwa County of Incheon Metropolitan City on Monday for the deal.

 

Based on Centurion&rsquo s audited financial statements as at Dec 31, 2022, the fair value of the property is 21.4 billion won.

 

Centurion expects the disposal to be completed on Apr 13. It does not anticipate that the disposal will have any material impact on its consolidated net tangible assets or earnings per share for the financial year ending on Dec 31, 2023.

 

MAINBOARD-LISTED dormitory operator Centurion Corporation has been given the go-ahead to increase the bed capacity at its quick-build dormitory (QBD) sites, as supply remains tight.

 

Centurion Corporation chief executive Kong Chee Min said the company has received approval from JTC to add 888 more beds at its Westlite Jalan Tukang and Westlite Tuas Avenue 2 dormitories, two QBDs that began operations in 2021.

 

QBDs are temporary structures built during the pandemic to create additional bed space for migrant workers.

 

Centurion has a lease term of three years at the two sites, with an option to extend the lease by a year after that.

 

The company operates five purpose-built dormitories (PBD) with 27,530 beds, and four QBDs with 6,368 beds. An average of 97 per cent of its rooms were leased out for the year ended Dec 31, 2022.

 

QBDs were at first required to provide workers with 6 sq m of living space per bed, but new regulatory specifications mandate only 4.2 sq m of space.

 

Kong said that, by adjusting the current configuration of the rooms, each apartment unit will be able to house six residents, up from the current five.

 

The company will have to pay more for its master lease and incur expenditure on refurbishment works, but it believes it is &ldquo financially sensible and viable&rdquo to go ahead, noted head of communications David Phey.

 

He added, however, that given that the assets have a fairly short lease remaining, and costs have to be incurred, &ldquo the revenue uplift is not a lot&rdquo .

 

For the full-year ended December 2022, Centurion&rsquo s earnings rose 36 per cent to S$71.4 million its revenue came in 26 per cent higher at S$180.5 million.

 

The company is hoping that the continued constraints on dormitory supply will make the authorities more willing to extend the leases of the QBDs.

 

Phey said: &ldquo It may be a bit early to speculate, but I think that unless there is a faster solution to meeting the demand, there would have to be other means of keeping the bed supply stable until the new dormitories are developed.&rdquo

 

Centurion&rsquo s joint venture with construction company Lian Beng Group received approval to build a 1,650-bed PBD in January, but construction on this dormitory is expected to be completed only in 2025.

 

The PBD will have a 30-year land lease, and be the first to be developed by the private sector under the new regulatory specifications announced by the Ministry of Manpower (MOM) in September 2021, Kong said.

 

Centurion launched a &ldquo spare beds&rdquo programme in February to alleviate a supply crunch, after consulting with MOM and other industry associations.

 

Under this programme, employers can return leased but unoccupied beds. If the beds are successfully reassigned, employers receive a 50 per cent rebate for the committed bed rental, and S$50 a month for adjusted utilities consumption.

 

Employers who require the bed space are to give Centurion seven days&rsquo notice if they require those beds again.

 

The number of work permit holders in the construction, marine shipyard and process sectors went up to 415,000 last December, up from the December 2019 (pre-pandemic) levels of 370,100.

 

Increased numbers aside, rising rental rates in private residential facilities have also contributed to the demand for beds. Some employers are not legally required to house workers in approved dormitories, but high rentals in private residential facilities have pushed them to seek beds in PBDs, Kong said.

 

Post-pandemic, dormitories are now required to set aside a higher ratio of beds for workers who are ill and need to be isolated. This has also hit supply.

 

Phey said some smaller players have exited the market, with the new Foreign Employee Dormitories Act (Feda) coming into force. The Act requires operators who have at least seven beds to be licensed, a sharp drop from 1,000 beds before.

 

This confluence of surging demand, tight supply and inflationary pressures has led to a rise in rentals at PBDs.

 

Phey estimated the market rate of a PBD bed to be now between S$380 and S$520, up from between S$250 and S$280 per month.

 

He added that Centurion has increased its prices where necessary, but is not &ldquo pricing at the top of the market, because it&rsquo s also about employer sustainability&rdquo .

Centurion Corporation OU8 0.00%   has reported earnings of $38.5 million for the 2HFY2022 ended Dec 31, 2022, 12% lower y-o-y as other income, share of profit of associated companies and joint ventures (JVs) and net fair value gain on investment properties fell. The group&rsquo s expenses for the half-year period also grew, offsetting the higher revenue.

 

This brings FY2022 earnings to $71.4 million, 36% higher y-o-y amid growth in revenue and higher net fair value gain on investment properties.

 

FY2022 revenue increased by 26% y-o-y to $180.5 million due to revenue growths across all segments and due to higher financial occupancies across the group&rsquo s markets. The higher revenue was also due to higher contributions from four new quick build dorms (QBDs) compared to the two new ones in FY2021.

 

FY2022 revenue from the group&rsquo s Westlite accommodation purpose built workers accommodation (PBWA) segment increased 23% y-o-y to $134.7 million due mainly to strong revenue contributions in Singapore with the reopening of the Singapore borders and easing of Covid-19 restrictions during 2022.

 

Financial occupancy of the group&rsquo s Singapore purpose-built dormitories improved by 12 percentage points y-o-y to 97% in FY2022.

 

The group&rsquo s dwell student living purpose built student accommodation (PBSA) segment rose 38% y-o-y to $44.2 million due to the lifting of travel restrictions and a return of international students underscored by shortfalls in PBSA bed supply.

 

Average financial occupancy of the group&rsquo s PBSA assets in the UK rose by 18 percentage points y-o-y to 90% in FY2022 while average financial occupancy of the PBSA assets in Australia rose by 47 percentage points y-o-y to 73% in FY2022.

 

Gross profit grew by 31% y-o-y to $123.6 million in FY2022 in tandem with the higher revenue.

 

In the FY2022, the group recognised a net fair value gain of $19.0 million from FY2021&rsquo s loss of $3.1 million. The gain is mainly due to its investment properties in UK, Malaysia and Australia, offset against the fair value loss of investment properties in Singapore as well as against the adjustment of fair value of the right of use (ROU) investment properties.

 

Earnings per share (EPS) for the FY2022 stood at 8.50 cents.

 

Cash and cash equivalents as at Dec 31, 2022, stood at $66.6 million.

 

A final dividend of 0.5 cent has been recommended, bringing the FY2022 dividend to 1 cent per share. The dividend will be paid on May 31.

 

&ldquo The group has delivered strong full-year results in 2022, which reflect the resilience and sustainability of our core business. With the continued return of foreign workers and international students across our markets, we have been able to grow our occupancies and rental rates, effectively cushioning increases in operating costs and finance expenses,&rdquo says CEO Kong Chee Min.

 

&ldquo We will continue to monitor and moderate the impact of the dual headwinds of inflation, including energy costs, and interest rate escalation. While we focus on providing a safe, caring and inclusive home-away-from-home for our migrant worker and student communities, the group will also continue to explore opportunities to expand and enhance our portfolio of owned and managed assets, to deliver sustainable long-term value to our stakeholders,&rdquo he adds.

 

CENTURION Properties, the parent company of Singapore Exchange-listed Centurion Corporation, is planning to develop an A$132.17 million (S$121.5 million) student accommodation in Sydney through its Australian unit.

 

The housing complex, situated at 17-21 Lachlan Avenue and 163 Herring Road in Macquarie Park, is expected to hold 732 units in a mix of cluster apartments as well as standard and premium studios.

 

Located about 500 m from the centre of the Macquarie University campus, the site is also less than five minutes&rsquo walk from a metro station which provides access to Sydney&rsquo s central business district in less than an hour, said a report from real estate intelligence site Mingtiandi on Monday (Feb 6).

 

The move comes as the group expects international students to return following a return to normalcy post-Covid-19.

 

&ldquo The continued growth in domestic student numbers is likely to increase demand for student accommodation close to the Macquarie University Campus,&rdquo wrote developers in an application reported by Mingtiandi.

 

&ldquo By contributing to the supply of housing specifically for students, it is assumed the proposal will assist in reducing any transference of this demand to the private rental market.&rdquo

 

Centurion Corporation, which is based in Singapore, told Mingtiandi that it was not involved in the transaction.

 

A JOINT venture (JV) by Centurion and Lian Beng has been awarded a JTC tender for the lease of land, to develop and use as a foreign workers&rsquo dormitory. The land is located at Ubi Avenue 3 and the tendered price is about S$40.2 million.

 

The Centurion-Lian Beng JV company is 51 per cent owned by Centurion, with the remaining 49 per cent owned by Lian Beng. Centurion owns and develops purpose-built workers and student accommodation, and manufactures and sells optical disc and storage products. Lian Beng is a construction company.

 

Centurion will be committing about S$43.4 million to the JV, which includes the price of the lease and development of the property. This will be funded by the company&rsquo s internal resources and borrowings. Similarly, Lian Beng will also be funding the JV from internal resources and borrowings.

 

The transaction will not have any financial impact on either company.

 

The lease and development of the land is in line with Centurion&rsquo s strategy to grow its workers accommodation business in Singapore, and represents an opportunity to enlarge its portfolio to 35,550 beds here. With growing demand and an undersupply of such beds in Singapore, Centurion expects the land to be accretive upon completion and provide rental income and capital appreciation potential.

 

This transaction is also viewed as an ordinary course of business for Lian Beng in providing dormitory accommodation and represents an opportunity to grow its dormitory business and build on its existing portfolio. The company expects to derive rental returns to add to earnings with this transaction.