Centurion-Lian Beng joint venture wins tender for foreign workers’ dormitory

Benjamin Cher

Published Sun, Jan 15, 2023 · 08:09 PM

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’ 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’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’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.