IPO for Centurion’s new Reit at ‘very advanced’ stage, launch likely in September

[SINGAPORE] If all goes well, Centurion Corp may launch the initial public offering (IPO) of its new real estate investment trust (Reit) as soon as September, said chief executive officer Kong Chee Min.

At the group’s results briefing on Friday (Aug 8), Kong said the upcoming IPO was at a “very advanced stage”, though the group has yet to receive its eligibility-to-list letter from the Singapore Exchange.  

He added that Centurion was “quite committed” to the trust, named Centurion Accommodation Reit, and will have “quite a high stake” in it. The group had previously said in the Reit’s announcement last month that it will hold around a 45 per cent stake in the trust initially, before lowering its interest to 35 to 40 per cent. 

That is not to say Centurion will be divesting more assets; instead, the aim is to expand its portfolio and assets under management, noted Kong. 

This means Centurion, as the sponsor, will continue developing assets and will wait for them to stabilise before injecting them into the Reit, he said. The trust will also independently seek to acquire completed assets from other owners looking to monetise. 

For now, the Reit will comprise 14 properties: five purpose-built worker accommodation (PBWA) assets in Singapore, eight purpose-built student accommodation assets in Britain and one in Australia. 

Kong said Centurion’s Malaysia assets will not be included in the Reit, given the emerging market risk, but that the listco will continue expanding its portfolio in the country. 

“I would say that the performance (in Malaysia) is not too bad, except for the currency,” he explained. “We are pretty confident that this is only short-term headwinds.” 

In terms of asset class, Kong said the Reit will lean heavily towards PBWA assets. 

With land being scarce in Singapore, and growth dependent on government tenders, Centurion is actively working with the authorities to identify suitable land for such assets, said the CEO.  

“I think there are four remaining sites (up for tender)… and we will take the opportunity to tender (for them) when they become available,” he added. 

Opportunities abound

At the results briefing, Centurion communications head David Phey highlighted strong demand for PBWA assets in multiple countries. This includes existing markets, such as Singapore and Malaysia, as well as other potential markets in the Middle East, including the United Arab Emirates and Saudi Arabia. 

Demand in these markets has also outpaced the supply of purpose-built, professionally managed, good-quality workers’ dormitories, said Phey. 

On the student housing front, Phey noted that investment appetite for such assets remains strong, especially in the UK. Annual investment in the UK alone rose by 14 per cent to almost £4 billion (S$6.9 billion) in 2024, on the back of “very positive underlying fundamentals” with a shortage of beds across cities. 

This brought Centurion’s revenue for the first half-year of FY2025 to S$140.7 million, up 13 per cent from S$124.4 million in the corresponding year-ago period. 

Net profit, on the other hand, fell 38 per cent to S$73.9 million, weighed down by net fair value loss on investment properties – at S$3.5 million – from a net fair value gain of S$61.6 million in the year-ago period. 

Distribution, administrative and finance expenses also shot up by 39 per cent, 22 per cent and 8 per cent, respectively. 

Earnings per share consequently dropped to S$0.0879. Meanwhile, net asset value per share was S$1.44 as at end-June. 

Net gearing ratio also fell to 27 per cent, which will give the group ample “firepower” to support future developments and acquisitions, said Kong.

Looking ahead, Phey said the group will continue looking for development opportunities in existing markets, as well as new markets such as the Middle East. 

“At the same time, we’ll look for capital recycling and reallocation to drive growth, and very much focus on pushing for asset-light models,” he said. 

“We expect more moderate rental reversions – flatter, but still growing – and we will continue to practise financial prudence in managing against possible economic uncertainties, such as trade war impacts.”