Centurion Accommodation Reit eyes sponsor pipeline for acquisitions as H1 results beat IPO forecast
The Reit may look at Centurion Corporation’s development assets, including the upcoming Kranji Close dormitory
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[SINGAPORE] A pipeline of assets under development by Centurion Corp could be assessed for acquisition by Centurion Accommodation Reit (CAReit), the Reit’s manager said.
One such asset is the sponsor’s newly announced Kranji Close project. On Wednesday (Aug 5), Centurion Corp secured the tender for the purpose-built dormitory site with a winning bid of S$343 million.
The 30-year leasehold site spans about 22,079 square metres and has a gross plot ratio of 3.0, allowing for a development with a capacity of 7,000 beds.
Ginny Ang, chief investment officer of the manager, said at a media briefing that the sponsor has a track record of developing specialised living assets, some of which could form the Reit’s acquisition pipeline across the purpose-built worker accommodation (PBWA) and purpose-built student accommodation (PBSA) segments.
A pipeline of seven assets in worker and student accommodation in Singapore, the UK and Australia translates to about 9,198 beds, and is expected to be completed between 2026 and 2028.
These include two upcoming projects: one in Melbourne, which will have about 644 beds and is expected to complete in the first quarter of 2027; and one in Perth, in which the sponsor holds a 25 per cent stake, comprising about 182 beds, with an expected completion date of Q2 2027.
“When the sponsor intends to sell, then the Reit has the first right of refusal to consider its purchase on its merits, which the Reit will assess,” Ang said.
Asked whether Kranji Close would be a natural acquisition candidate, Tony Bin, CEO of the manager, said the arrangement fits the sponsor’s capital recycling strategy, under which assets are stabilised before being sold down.
H1 results beat forecast
CAReit reported a stronger-than-expected first-half performance, with distribution per unit of S$0.03499 for the six months ended Jun 30, exceeding its initial public offering forecast by 9.6 per cent.
Revenue rose to S$108.9 million, 5.1 per cent above the forecast, supported by stronger PBWA rental rates and bed sales, favourable currency movements, and S$1.1 million in additional revenue from expanded capacity at Westlite Toh Guan and Westlite Mandai.
Net property income increased 4.3 per cent to S$78.4 million, while the amount available for distribution to unitholders came in at S$60.5 million, 9.6 per cent above the prospectus forecast.
As at Jun 30, aggregate leverage stood at 29.9 per cent, while the portfolio was valued at S$2.2 billion. Operational bed capacity has grown 25.7 per cent to 30,236 beds since the IPO.
Separately, Bin said CAReit was preparing for the expiry of a two-year master lease at a PBSA asset in Sydney, at the end of 2027. The 732-bed asset was acquired by CAReit in January this year.
CAReit said fixed rental income would come in at A$14.1 million (US$9.9 million) for FY2026 and A$20 million for FY2027.
Bin said the operator is expected to continue managing the property after the lease expires, providing “certain consistency” in how the asset is run.
He added that newly opened student accommodation properties typically start with lower student retention because they lack returning residents.
“We believe that the third year will be better than the first two years,” he said.
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