Centurion Accommodation Reit launches IPO at 88 cents per unit, aims to raise $771m

SINGAPORE – Centurion Accommodation Reit will launch its initial public offering (IPO) at 10pm on Sept 18, marking the second-largest listing on the Singapore Exchange (SGX) in 2025 so far.

The real estate investment trust (Reit) is offering 262.2 million units priced at 88 cents each, of which 13.2 million units will be available to the public. The offer will close on Sept 23. There will also be an international placement of around 249 million units.

Over 614 million more units will be taken up by 16 cornerstone investors, which include DBS Bank, Amova Asset Management and abrdn Asia.

The Reit is sponsored by mainboard-listed accommodation provider Centurion Corp, which will subscribe to more than 414 million units, while another over 428 million units will be disbursed as consideration units for certain transactions.

It is aiming to raise around $771 million from the IPO, and is expected to have a market capitalisation of more than $1.5 billion upon listing.

The Reit, the second to list in 2025 since NTT DC Reit went public in July, will begin trading on the SGX mainboard from 2pm on Sept 25.

It will hold an initial portfolio of 14 properties valued at $1.8 billion.

These comprise five purpose-built worker accommodation (PBWA) assets located in Singapore, eight purpose-built student accommodation (PBSA) assets located in Britain, and one PBSA asset located in Australia.

An upmarket student property in Sydney is set to be divested by the sponsor into the Reit in early 2026, bringing the total portfolio value to $2.1 billion.

Distribution yield is projected at 7.47 per cent for 2026 and 8.11 per cent for 2027, based on the expanded portfolio and offer price.

Centurion Asset Management chief executive Tony Bin said at a Sept 18 briefing that strong market tailwinds are underpinning demand for beds across its student and worker accommodation assets.

In Singapore, the migrant worker population is expected to grow as a result of a rise in infrastructure and property development, and is estimated to reach half a million in the next four years.

There are currently about 124,000 PBWA beds in Singapore, with the number expected to rise to around 150,000 over the same period, Mr Bin noted.

Demand for beds has kept occupancy rates above 90 per cent so far, save for the peak of the Covid-19 pandemic.

Prospects are also looking bright for student accommodation in Australia and the UK, Mr Bin said.

For instance, there are 5.5 extra students for every new bed in the UK, where two-thirds of tenants are domestic students, according to industry research.

“They provide that resilience and give a little buffer from international issues,” Mr Bin said.

At its properties in Australia, tenants are mostly international students from China.

He said the slowdown in China’s economy has not led to a notable drop in demand from Chinese students, given the strong appeal of the universities where the Reit’s properties are situated.

Mr Teo Chee Kiat, chief financial officer for the Reit manager, noted that the Reit will not face any debt repayments until 2028, and its borrowings will amount to about 31 per cent of its assets after the 15th property is added to the portfolio.

The Reit has about $550 million in borrowing capacity before hitting the 45 per cent debt limit set on Reits by local regulators, he said.

Mr Bin said the Reit is more comfortable with a lower headroom at a 40 per cent ratio.

He added that the Reit has not ruled out expanding into co-living spaces or retirement villages, and that it may consider a debt raise from the market, if appropriate.