CGS International
July 21, 2025

Centurion Corporation: Unlocking Value with Upscale Student Living and REIT Spin-off

Introduction: Centurion’s Strategic Expansion in Property Investment

Centurion Corporation Ltd (CENT), a prominent player in the accommodation sector, is making headlines with its latest foray into the premium student housing market and a value-unlocking REIT spin-off. Anchored in Singapore and expanding globally, Centurion is positioning itself to capture new growth opportunities by launching its high-end Epiisod brand and crystallizing asset value through the proposed Centurion Student Accommodation REIT (CAREIT).

Key Highlights and Investment Summary

– Centurion launches Epiisod, targeting upscale, experience-driven student accommodation demand. – The REIT spin-off is estimated to unlock S\$1.4bn in value, with CENT retaining a 35-40% stake. – The new target price is S\$2.05, up from S\$1.46, driven by pure RNAV valuation. – Strong demand for purpose-built worker accommodation (PBWA) in Singapore and Malaysia, and tight student housing supply in Australia and the UK, support robust growth prospects. – Major catalysts include CAREIT’s successful listing and the operational ramp-up of new premium assets.

Epiisod: Premium Student Accommodation Redefining the Market

Centurion’s Epiisod Macquarie Park in Sydney marks a strategic move into upscale student accommodation. This new development, adjacent to Macquarie University, offers 732 fully furnished rooms with premium amenities:

• High-end facilities: Rooftop infinity pool, gym, yoga room, sauna, and ice baths
• Wellness-focused living: Curated wellness programs and social events
• Tech-enabled features: Keyless smart entry and smart home IoT systems
• Convenience: 5-minute walk to the metro (direct access to Sydney CBD) and 10-minute walk to Macquarie Centre, a major retail and lifestyle hub

This launch allows CENT to tap into the rising affluence of international students, with Australian university enrolments surpassing 1.09 million in 2024, a 15% jump from pre-pandemic levels.

Structural Demand Shift: From Value to Experience in PBSA

The global purpose-built student accommodation (PBSA) sector is evolving. Students are increasingly seeking comfort, community, and wellness, with modern PBSAs commanding up to a 50% premium over traditional two-bedroom apartments. Features like fully furnished rooms, inclusive amenities, and advanced security are now standard among premium offerings.
Epiisod Macquarie Park is designed to meet these expectations, with:

• Single Occupancy Units (SOU) of ~16sqm featuring ensuite bathrooms and kitchenettes
• Hotel-like receptions and dedicated study areas
• Communal zones to foster social connections

Australian PBSA: Supply Constraints Fueling Rental Growth

– The Australian PBSA market is constrained by below-average new completions and surging international student demand. – The student-to-bed ratio remains high (4.0 nationally, 5.8 in New South Wales). – Rental growth since 2022: Perth (+20% annually), Brisbane (+16%), Sydney (+10%). – Sydney’s studio PBSA rents have soared ~56% since 2018. – Market rents for Epiisod’s SOU are estimated at ~A\$700 per bed per week. – Development cost for Epiisod MP is ~A\$132m (S\$122m), with expected NPI margins of 62.5% and yield on cost of 10–11%, outpacing the current portfolio cap rate of 6.3%.

Portfolio Upscaling and Expansion Plans

Centurion is leveraging Epiisod for portfolio upscaling, expecting a yield uplift over its mid-market Dwell PBSA brand. Plans are underway to introduce Epiisod at four additional sites across Melbourne and Perth, further solidifying its premium positioning.

REIT Spin-off: Unlocking Value for Shareholders

The proposed CAREIT spin-off aims to monetize CENT’s mature, stable assets and redeploy capital for growth. The initial CAREIT portfolio will include:

• 5 PBWA assets in Singapore
• 8 PBSAs in the UK
• 1 PBSA in Australia

CAREIT is set to acquire Epiisod Macquarie Park upon practical completion in December 2025, raising the portfolio’s value to S$2.0bn (net asset value of S$1.4bn after accounting for a 30% net debt-to-asset ratio).

Valuation Update and Target Price Revision

CENT’s valuation methodology now shifts to a pure RNAV approach, reflecting the company’s recurring rental income and long-term asset appreciation. The RNAV calculation incorporates the CAREIT spin-off, expected asset acquisitions, and applies a 20% discount (in line with peers trading at 0.8x P/RNAV).

RNAV and SOTP Valuation Table

Combined RNAV (S\$ m): 2,155.6
RNAV per share (S\$): 2.56
20% Discount Applied:
Target Price (S\$): 2.05

Financial Performance and Projections

Centurion’s financial outlook remains robust, with significant improvements across key metrics:

Core EPS is revised up by 6% for FY26F and 5% for FY27F, reflecting stronger contributions from newly completed PBSA assets in Australia.
The company expects a significant net profit increase for 1H25F from fair value gains on investment properties.

Peer Comparison

Centurion compares favorably against sector peers:

ESG Initiatives and Regulatory Compliance

CENT’s centralised accommodation model supports higher living standards for workers and students. Both Malaysia and Singapore have introduced enhanced dormitory standards, and Centurion is already compliant or planning asset enhancements to meet these requirements by 2030. The company also:

• Promotes holistic well-being for residents through social, physical, and mental wellness programs.
• Seeks to benefit from rising corporate awareness of migrant worker welfare.
• Is encouraged to further reduce energy intensity and expand renewable energy adoption.

Risks and Catalysts

Key risks include:

• Potential declines in occupancy or rental rates
• Limited pipeline of suitable assets for future acquisitions

Key catalysts:

• Successful listing of CAREIT
• Operational ramp-up of new premium PBSA assets

Conclusion: A Compelling Investment Case

Centurion’s strategic push into premium student accommodation, combined with its REIT spin-off, positions the company for sustained growth and value creation. With robust financials, a clear expansion path, and favorable sector dynamics, CENT is well-placed to deliver superior returns to investors. The upward revision of the target price to S\$2.05 underscores confidence in the company’s recurring income profile and asset appreciation potential.

Stock Ratings Framework

Add: Expected total return exceeds 10% over the next 12 months.
Hold: Total return expected between 0% and 10%.
Reduce: Total return expected below 0%.
Stock price targets are based on a 12-month investment horizon.

Major Shareholders

• Centurion Properties Pte Ltd: 50.6%
• Teo Peng Kwang: 7.6%
• David Loh Kim Kang: 5.3%

Contact Information for Key Analysts

• William TNG, CFA: +65 6210 8676, [email protected]
• TAN Jie Hui: +65 6210 6784, [email protected]

Price Performance

• 1M: +3.2%
• 3M: +35.3%
• 12M: +155.6%