PROPERTY player Centurion : OU8 0% is selling two of its assets in Malaysia to the country’s largest public sector pension fund, Kumpulan Wang Persaraan (KWAP), for a total consideration of RM227 million (S$65.2 million).

This is above the properties’ collective net tangible asset value of RM224.3 million as at Jun 30, 2023, noted the group on Monday (Dec 4).

The company has also agreed to lease back the properties from KWAP for a period of 15 years from completion of the sale. 

Centurion owns, develops and manages purpose-built worker and student accommodation facilities.

The company said its latest deal is part of an ongoing strategic rationalisation of Centurion’s portfolio assets, aiming to recycle and deploy capital into growing its portfolio of assets under management.

The deal is also aligned with Centurion’s strategy to grow its business via asset-light means.

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“This sale-and-leaseback transaction exemplifies the strategy by which Centurion intends to optimise its capital, enlarge its portfolio and expand revenue streams. The group will pursue this model and similar asset-light strategies for synergistic, scalable growth of its specialised accommodation business across all global markets moving forward.”

Both properties being divested by Centurion are purpose-built workers accommodation (PBWA) assets built on freehold land.

One of the two PBWAs, Westlite Bukit Minyak, is located in Penang and has a total capacity of 3,321 beds. It comprises three eleven-storey accommodation blocks across 16,398 square metres (sq m).

The other asset in Johor, Westlite Tampoi, is made up of six accommodation blocks with a total capacity of 5,790 beds. The property spans some 28,328 sq m.

“This divestment presents an opportunity for the group to unlock value, drive further portfolio enhancements in an asset-light manner, and at the same time allows the group to remain invested in Malaysia’s growing need for quality worker accommodations going forward,” said Centurion chief executive Kong Chee Min.

KWAP chief investment officer Hazman Hilmi Sallahuddin added that he expects such an investment to “generate attractive risk-adjusted returns, foster social impact, and support industrial investments in Malaysia”.

Centurion said it does not expect the transaction to have a material impact on its consolidated net tangible assets, nor earnings per share, for its current financial year ending Dec 31, 2023.

The counter was flat at S$0.40 as at the midday trading break on Monday, prior to the announcement.