Centurion Accommodation REIT (CAREIT) has marked a significant milestone with its successful spin-off from Centurion Corporation and highly sought-after initial public offering (IPO) on the Singapore Exchange (SGX), creating Singapore’s first pure-play accommodation REIT. Launched in September 2025 at an IPO price of S$0.88 per unit, the offering was overwhelmingly popular, with institutional placement oversubscribed over 16 times and retail subscription exceeding 30 times. The REIT began trading at S$0.98 per unit, representing an 11.4% premium over the IPO price, underlining robust investor confidence. The IPO raised approximately S$771 million, resulting in a market capitalisation exceeding S$1.5 billion, making it Singapore’s second-largest IPO of the year. The portfolio, valued at S$1.8 billion, comprises 14 purpose-built worker and student accommodation assets spread across Singapore, the UK, and Australia, with plans to increase to 15 assets by early 2026.

Centurion Accommodation REIT distinguishes itself as the first and only living accommodation REIT listed in Singapore, offering investors exposure to high-occupancy, purpose-built workers’ accommodation (PBWA) and purpose-built student accommodation (PBSA) assets. Occupancy rates are impressively high, standing at 99.2% for PBWA and 98.2% for PBSA as of 2024, reflecting the essential nature of these accommodation types and skilled management. The portfolio is geographically diversified across supply-constrained and resilient markets, including Singapore’s tight PBWA landscape, and expanding student accommodation markets in the UK and Australia.

The strategic support from Centurion Corporation and its experienced leadership—led by Tony Bin, the REIT manager’s CEO with over 30 years of industry experience—adds to CAREIT’s growth prospects. The REIT benefits from a right-of-first-refusal (ROFR) on Centurion’s pipeline of assets, enabling accretive acquisitions and pipeline expansion. CAR's leverage remains prudent at 20.9% at IPO, anticipated to rise to 31% following the acquisition of the Sydney PBSA asset, enhancing the portfolio’s asset base and projected net property income (NPI).

Market fundamentals underpinning CAREIT’s potential are strong. Singapore’s PBWA market has grown robustly to S$3.7 billion in 2024, with a five-year compound annual growth rate (CAGR) of 13.1%, and is expected to maintain a near 10% CAGR through 2029. This growth is driven by ongoing demand for foreign worker accommodation in key sectors such as construction and marine, stronger quality regulations elevating supply standards, and supply constraints due to lease non-renewals and retrofitting requirements. Meanwhile, the UK and Australia’s student accommodation markets benefit from increasing international student populations, limited on-campus housing, and rising preferences for modern, managed living environments.

The portfolio’s long weighted average lease expiry (WALE), exceeding 30 years on 84% of assets, provides income stability and mitigates the risks of lease renegotiations. This, coupled with robust occupancy and diversified geographies, offers investors a resilient income stream with growth potential. Forecast distribution yields are attractive, with UOB Kay Hian projecting 6.2% for 2026 and 7.2% for 2027. The firm initiated coverage with a buy recommendation and a target price of S$1.23, valuing the REIT using a dividend discount model with a required return of 8% and growth rate of 2.8%.

CAREIT’s immediate growth drivers include the planned acquisition of the Epiisod Macquarie Park PBSA asset in Sydney, expected to close in early 2026, and expansion of the Westlite Mandai PBWA capacity by nearly 2,000 beds. These initiatives are forecast to boost NPI by over 11% year-on-year by 2026 and increase total portfolio value to more than S$2.1 billion, underscoring the REIT’s expanding scale.

In summary, Centurion Accommodation REIT represents a compelling opportunity for investors seeking resilient, income-generating real estate with geographic diversification across essential worker and student accommodation sectors. Its strong sponsor backing, pipeline visibility, long lease tenures, and solid operational performance position it well for sustainable growth and income resilience amid evolving market dynamics.

📌 Reference Map:

  • Paragraph 1 – [1] NextInsight, [2] Business Times, [3] The Straits Times, [4] The Straits Times, [5] Reuters, [6] REITsWeek
  • Paragraph 2 – [1] NextInsight, [2] Business Times
  • Paragraph 3 – [1] NextInsight
  • Paragraph 4 – [1] NextInsight, [2] Business Times, [3] The Straits Times
  • Paragraph 5 – [1] NextInsight
  • Paragraph 6 – [1] NextInsight

Source: Noah Wire Services