CGS International
July 21, 2025

Centurion Corporation: Unlocking Value with Premium Student Living and Strategic REIT Spin-Off

Introduction: Centurion’s Ambitious Growth in PBSA and PBWA

Centurion Corporation Ltd is taking bold steps to redefine its position in the property investment sector, leveraging strong tailwinds in purpose-built student accommodation (PBSA) and workers accommodation (PBWA). With the launch of Epiisod—its new premium PBSA brand—and plans to spin off its student accommodation assets into a dedicated REIT, Centurion is poised for accelerated growth and value creation for its shareholders.

Centurion’s Epiisod: Elevating the Student Experience in Australia

Centurion’s newest initiative, Epiisod, targets the upscale end of the international student accommodation market. The flagship property, Epiisod Macquarie Park (Epiisod MP), is strategically sited 500 meters from Macquarie University in Sydney and within walking distance to both the metro station and Macquarie Centre, a major retail hub.
Key highlights of Epiisod MP:

• 732 fully furnished single-occupancy units, averaging 16 sqm each
• Premium amenities: rooftop infinity pool, gym, wellness center with sauna, yoga, ice baths
• Tech-enabled living: keyless smart entry, IoT systems
• Curated lifestyle: wellness programs, social events, communal study and social spaces
• Hotel-like reception for a high-end student enclave
• Targeted for practical completion by December 2025

This move taps into surging international student numbers in Australia, which reached a record 1.09 million enrollments in 2024—up 15% from 2019. Centurion is capitalizing on a structural shift in student demand: today’s students seek comfort, community, and wellness over basic accommodation, allowing for pricing at a premium—up to 50% over standard two-bedroom apartments in the same area.

Australian PBSA Market: Robust Demand, Tight Supply, and Rising Rents

Australia’s PBSA market is marked by strong demand and supply constraints:

• Australia’s international higher education student-to-bed ratio stands at 4.0; New South Wales, at 5.8
• Only around 133,000 PBSA beds nationally as of 2024
• Sydney’s weekly studio rents have risen 56% since 2018
• Perth saw the strongest rental growth since 2022 (+20% annually), followed by Brisbane (+16%) and Sydney (+10%)

Centurion expects single-occupancy units at Epiisod MP to charge c.A\$700 per week, in line with market rates. With an estimated development cost of A\$132m (S\$122m) and NPI margins of 62.5%, yield on cost is projected at 10-11%—well above the current 6.3% capitalisation rate for Australian PBSA assets.

Strategic REIT Spin-Off: CAREIT as a Value Catalyst

Centurion’s planned REIT spin-off, Centurion Student Accommodation REIT (CAREIT), is a significant value-unlocking catalyst:

• Initial portfolio: 5 PBWA assets in Singapore, 8 PBSAs in the UK, and 1 PBSA in Australia
• CAREIT aims to acquire Epiisod MP post-completion in Dec 2025, boosting total portfolio value to S\$2.0bn
• Assumed net debt-to-asset ratio: 30%
• Estimated spin-off value for CAREIT: S\$1.4bn
• Centurion to retain 35-40% stake in CAREIT
• Portfolio expansion plans include at least four more Epiisod sites in Melbourne and Perth

This spin-off enables Centurion to monetize mature assets and recycle capital into new growth opportunities, while focusing CAREIT on stable, income-generating properties.

Financial Performance and Upgraded Valuation

Driven by robust demand for PBWA in Singapore and Malaysia and strong inflows of international students in Australia and the UK, Centurion is on a strong growth trajectory.
Key Financials:

Centurion’s share price has surged, posting a 35.3% rise over three months and a 155.6% increase over the last year. The target price is upgraded to S$2.05 (from S$1.46), reflecting a move to a pure RNAV (Revalued Net Asset Value) valuation approach and applying a 20% discount, consistent with hospitality REIT sector benchmarks.

RNAV and SOTP Valuation Breakdown

Peer Comparison

ESG and Regulatory Compliance: Supporting Sustainable Growth

Centurion’s business model is aligned with tightening regulatory standards in Singapore and Malaysia for workers’ housing. Both countries have introduced new standards to improve living conditions, with Singapore’s Dormitory Transition Scheme (DTS) and Malaysia’s updated requirements. Centurion has proactively complied with these standards and is executing Asset Enhancement Initiatives (AEIs) to further upgrade existing dormitories.
The company also focuses on social impact, offering holistic programs for migrant workers’ well-being. Environmental initiatives are ongoing, with a call for more proactive measures to reduce electricity and water consumption and explore renewable energy.

Conclusion: Strong Upside with Well-Defined Catalysts

Centurion’s trajectory is shaped by clear catalysts:

• Accelerated value creation from the CAREIT spin-off
• Premiumization with Epiisod capturing a growing, affluent international student market
• Expansion into additional premium PBSA sites in key Australian cities
• Recurring rental income streams and long-term asset appreciation
• Proactive ESG and regulatory compliance limiting downside risks

Risks to monitor include potential declines in occupancy or rental rates and the availability of suitable acquisition assets. However, based on financial metrics, market positioning, and strategic execution, Centurion is well-placed to deliver superior returns for shareholders.
Broker Recommendation: ADD
Target Price: S$2.05
Upside: 27.3% from current price of S$1.61
Market Cap: S$1,354m | Free Float: 30.2%
Centurion’s compelling blend of sustainable growth, value unlocking, and sector leadership makes it a standout opportunity in the Asia-Pacific real estate investment landscape.