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Centurion Corp plans to buy UK student housing project for £18.7m

MAINBOARD-LISTED specialty housing provider Centurion Corp plans to pick up a student housing property in the British city of Manchester, to the tune of £18.7 million (S$33.66 million).

The proposed acquisition of 121, Princess Street, announced on Friday, is expected to be done in July 2018, with Centurion to enter into a letting agreement with an agent at the same time.

The six-storey freehold building, which has 127 beds in studios and one-bedroom apartments, would be managed under Centurion's student accommodation brand, dwell, and is set to bring the group's portfolio of student and worker lodgings to 27 properties.

Centurion said in a filing on the Singapore Exchange website that the contract was inked on Friday after arms’ length negotiations, on a willing buyer, willing seller basis. The consideration of the deal was about the same as desktop valuation appraisal of the property that was commissioned by Centurion and carried out by the independent valuer Cushman and Wakefield the week prior.

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The vendor in the deal was disclosed as one PS 121 Ltd in Centurion's filing. The landlord for 121, Princess Street, according to online listings, is Manchester-based Beech Properties, while the property has been included in a portfolio on the website of the parent Beech Holdings.

Local Manchester media reported in 2013 that 121, Princess Street, a warehouse turned nightclub, had been sold to a private investor after being marketed at £2.5 million.

According to pro forma financial effects of the acquisition, provided by the group for illustrative purposes, earnings per share and net tangible assets would have been unchanged had the acquisition been completed on Jan 1, 2017, because the property is undergoing refurbishment and no profit would be attributable until that is completed in end-June 2018.

The property is near both the University of Manchester and Manchester Metropolitan University, with Centurion highlighting a significant supply-demand imbalance in the Manchester purpose-built student accommodation (PBSA) market in an announcement on the SGX website.

The group said that the deal "is in the ordinary course of business of the group and in line with thegroup’s strategy to grow its student accommodation business and to build on the group’sexisting student accommodation portfolio globally".

Chief executive Kong Chee Min said in a media statement that "this acquisition demonstrates our continued optimism in the growth opportunities within the PBSA sector" and "further strengthens Centurion’s growth strategy".

Centurion closed up by 1.5 Singapore cents, or 3.23 per cent, to S$0.48, before the announcement.