Company Coverage
Centurion Accommodation REIT (CAREIT SP): Capacity Growth Largely Completed; Expanded Pipeline In Progress
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$1.13
S$1.39
23.0%
S$1.55
Analyst
Highlights
- Westlite Toh Guan and Westlite Mandai added 1,764 and 3,696 beds respectively, after construction was completed in Oct 25 and Jan 26. In total, the two new blocks expanded PBWA bed capacity by 25.7%. CAREIT has also commenced construction of a new block with 540 beds at Westlite Ubi after obtaining provisional planning permission in Feb 26.
- Sponsor Centurion Corporation has secured two 30-year leasehold sites at Kranji Close and Lok Yang Way with planned capacities of 7,000 and 5,000 beds in Aug 26. The sponsor has also acquired a 65% stake in a site at Kim Chuan Lane for development of PBWA, subject to regulatory approvals.
- Regulatory capacity loss has resulted in shortage of PBWA beds. CAREIT provides a DPU yield of 7.3% in 2027F. Maintain BUY. Target price: S$1.39.
Analysis
- Successfully completed expansion at Toh Guan and Mandai. Centurion Accommodation REIT (CAREIT) has expanded its worker dormitory capacity through new accommodation blocks at Westlite Toh Guan and Westlite Mandai, adding 1,764 and 3,696 beds respectively, after construction was completed in Oct 25 and Jan 26. It also secured approval to retain 664 existing beds at Toh Guan until 31 Dec 28 and 1,980 existing beds at Mandai until 31 Dec 30, bringing the properties’ total capacities to 9,094 and 9,986 beds respectively. These retained beds are additional capacities that would otherwise have been removed under the planned dormitory standards transition. The two new blocks expanded bed capacity by 25.7%.
- Building a new block at Westlite Ubi. CAREIT is developing a new six-storey accommodation block at Westlite Ubi, while altering the existing eight-storey block, to add 540 beds. This will increase the dormitory’s capacity by about 33% from 1,650 to 2,190 beds. Construction has commenced following provisional planning permission and payment of land premium of S$13.9m in Feb 26. The new block is expected to be operational in 4Q27.
- Sponsor expanding potential acquisition pipeline. Sponsor Centurion Corporation is expanding its development pipeline after securing sites for new worker dormitories in Singapore. In Aug 26, it secured two 30-year leasehold sites at Kranji Close and Lok Yang Way for S$343m and S$222m, respectively, with planned capacities of 7,000 and 5,000 beds. Both developments are targeted to be operational in 3Q28, adding a combined 12,000 beds. The sponsor has also acquired a 65% stake in a site at Kim Chuan Lane for potential development of a worker dormitory, subject to regulatory approvals. These projects provide future acquisition opportunities after these assets are completed and stabilised.
Highlights
- Westlite Toh Guan and Westlite Mandai added 1,764 and 3,696 beds respectively, after construction was completed in Oct 25 and Jan 26. In total, the two new blocks expanded PBWA bed capacity by 25.7%. CAREIT has also commenced construction of a new block with 540 beds at Westlite Ubi after obtaining provisional planning permission in Feb 26.
- Sponsor Centurion Corporation has secured two 30-year leasehold sites at Kranji Close and Lok Yang Way with planned capacities of 7,000 and 5,000 beds in Aug 26. The sponsor has also acquired a 65% stake in a site at Kim Chuan Lane for development of PBWA, subject to regulatory approvals.
- Regulatory capacity loss has resulted in shortage of PBWA beds. CAREIT provides a DPU yield of 7.3% in 2027F. Maintain BUY. Target price: S$1.39.
Analysis
- Successfully completed expansion at Toh Guan and Mandai. Centurion Accommodation REIT (CAREIT) has expanded its worker dormitory capacity through new accommodation blocks at Westlite Toh Guan and Westlite Mandai, adding 1,764 and 3,696 beds respectively, after construction was completed in Oct 25 and Jan 26. It also secured approval to retain 664 existing beds at Toh Guan until 31 Dec 28 and 1,980 existing beds at Mandai until 31 Dec 30, bringing the properties’ total capacities to 9,094 and 9,986 beds respectively. These retained beds are additional capacities that would otherwise have been removed under the planned dormitory standards transition. The two new blocks expanded bed capacity by 25.7%.
- Building a new block at Westlite Ubi. CAREIT is developing a new six-storey accommodation block at Westlite Ubi, while altering the existing eight-storey block, to add 540 beds. This will increase the dormitory’s capacity by about 33% from 1,650 to 2,190 beds. Construction has commenced following provisional planning permission and payment of land premium of S$13.9m in Feb 26. The new block is expected to be operational in 4Q27.
- Sponsor expanding potential acquisition pipeline. Sponsor Centurion Corporation is expanding its development pipeline after securing sites for new worker dormitories in Singapore. In Aug 26, it secured two 30-year leasehold sites at Kranji Close and Lok Yang Way for S$343m and S$222m, respectively, with planned capacities of 7,000 and 5,000 beds. Both developments are targeted to be operational in 3Q28, adding a combined 12,000 beds. The sponsor has also acquired a 65% stake in a site at Kim Chuan Lane for potential development of a worker dormitory, subject to regulatory approvals. These projects provide future acquisition opportunities after these assets are completed and stabilised.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$1.13
S$1.39
23.0%
S$1.55
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
