Centurion eyes US student quarters

The RMIT Village in Melbourne, Australia.
The RMIT Village in Melbourne, Australia. PHOTO: CENTURION CORP

A local firm that specialises in worker and student accommodation is planning to enter the United States, it was announced yesterday.

Centurion Corp is proposing to buy a portfolio of 1,936 beds in five student accommodation buildings across four US states for about US$136 million (S$185 million).

Its aim is to hold up to 30 per cent of the assets, with third- party investors owning the remaining stake. It has set up Centurion Overseas Investments (III) as a vehicle for the acquisition.

Mainboard-listed Centurion will also set up an investment management platform to manage the assets on behalf of third-party investors. It said the proposed acquisition will be completed around the end of September.

The properties are in Auburn, Alabama; Tallahassee, Florida; Madison, Wisconsin; and College Station, Texas. The cities have "US universities with good national rankings and sizeable student populations", the firm said.

The 624-bed property in Tallahassee, for example, is near Florida State University, which has around 41,000 students, while Tallahassee Community College has 12,500 students.

Two assets in Madison - one with 231 beds and another with 226 - are "a stone's throw" from the University of Wisconsin-Madison, which has "a yearly enrolment exceeding 43,300 students".

Once the sale is completed, the five fully operational assets will add to the group's earnings from the fourth quarter of this year.

Assuming the firm has a 30 per cent stake, the book value or net tangible asset value of that is about US$40.8 million.

Centurion will also enter a joint venture with a US firm to co-manage the assets under its student accommodation brand called dwell.

When the 1,936 beds from the US are added, Centurion will have 5,424 beds under management across 16 student accommodation assets in the US, Britain, Australia and Singapore.

Chief executive Kong Chee Min said: "The US is one of the key and established educational hubs in the world... and the proposed acquisition will immediately expand our business geographically and increase the earnings contribution from this resilient sector.

"It will also open a new business opportunity for Centurion, as we extend into the investment management of investments from like-minded investors."

A version of this article appeared in the print edition of The Straits Times on July 25, 2017, with the headline 'Centurion eyes US student quarters'. Print Edition | Subscribe