Centurion Shines as Small-Cap Standout Amid Dormitory Demand and REIT Prospects
Stock delivers 41.8% YTD return, outperforming STI as investors eye growth, asset monetisation
Centurion Corporation is emerging as a small-cap gem on the back of strong demand for worker accommodations and prospects of a REIT listing, according to analysts.
The Singapore-based company, which provides purpose-built worker and student accommodation across Asia-Pacific and Western markets, is benefiting from favourable supply-demand dynamics and a clear path for expansion.
Centurion’s Q1 FY2025 revenue climbed 13% year-on-year to S$69 million, driven by higher rental rates in Singapore. Analyst Yik Ban Chong of Phillip Securities attributed the growth to new capacity, notably the 1,650-bed Westlite Ubi facility, which launched in late 2024 and is now near full occupancy.
RHB Bank Singapore named Centurion one of its top small-cap picks in its Singapore Small Cap Jewels 2025 report, citing a robust earnings outlook and potential asset unlocks.
“Earnings are projected to grow 4% annually in FY2025 and FY2026, and 5% in FY2027, supported by strong bed rates and occupancy,” noted RHB’s Alfie Yeo. He added that revenue-generating beds are expected to rise 5.3% this year to 73,000.
Centurion is expanding aggressively in Singapore, Malaysia and Australia, and has also entered Hong Kong and China. In FY2024, it established two majority-owned partnerships to manage 1,500 build-to-rent apartments in China and a 539-bed foreign worker dormitory in Hong Kong.
Maybank Securities analysts Eric Ong and Jarick Seet highlighted Centurion’s resilience despite global trade uncertainties, and pointed to a clear expansion roadmap for 2025–2026.
Looking ahead, Centurion is exploring a potential REIT listing of its student and worker accommodation assets to shift towards a more asset-light model and generate fee income. RHB also noted that such a move could unlock value and lead to special dividends.
The company has previously monetised assets via sale-and-leaseback deals and continues to generate strong cash flows – over S$75 million annually for the past five years. Net gearing stood at 0.4 times in FY2024.
Centurion paid a dividend of S$0.025 per share in FY2023, representing about 30% of earnings. RHB expects this payout ratio to be maintained, with special dividends possible if more assets are unlocked and not reinvested.
While risks remain – particularly around occupancy and rental rates for student housing – analysts agree Centurion is well-positioned. The stock trades at nine times FY2025 forecast earnings and offers a 3% yield.
RHB has a target price of S$1.50 on Centurion shares, implying an 11.9% upside from Friday’s close of S$1.34. Year to date, the stock has delivered a total return of 41.8%, far outpacing the 5% return of the Straits Times Index.
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