Centurion Accommodation REIT Secures AUD145 Million Facilities for Strategic Acquisition

Key Highlights

• Centurion Accommodation REIT (CAREIT), a Singapore-based real estate investment trust, has secured a combined AUD145 million in facilities to fund a significant property acquisition and future growth.
• The facilities comprise a three-year AUD140 million term loan and a AUD5 million revolving credit line.
• The proceeds will be used to finance the acquisition of Epiisod Macquarie Park and support working capital and capital expenditure for the property.
• The borrowing entity is Centurion SA Investments Pty Ltd, acting as trustee for Centurion Macquarie Park Student Village Trust, a wholly-owned subsidiary of CAREIT.
• Obligations under the facilities are guaranteed by Perpetual (Asia) Limited (as trustee of CAREIT) and Centurion REIT Australia Pty Ltd (as trustee of Centurion REIT Australia Trust).

Shareholder and Price-Sensitive Information

• Mandatory Prepayment Events: The facility agreement contains covenants that may trigger mandatory prepayment if:
  • The Manager (Centurion Asset Management Pte. Ltd.) resigns or is removed.
  • Centurion Corporation Limited ceases to directly or indirectly own all issued share capital of the Manager, or loses its controlling interest in the Manager.

  Potential Impact: If such events occur and the borrower cannot repay the outstanding facility amount, this may trigger cross defaults across other CAREIT facilities, debt issues, and borrowings. As of the announcement, the total borrowings potentially affected are estimated at S\$375 million (excluding interest). This could have significant implications for the financial stability and share price of CAREIT.

• Current Status: The triggering events have not occurred as of the announcement, but shareholders are advised to monitor these risks closely as they are material and could have an adverse impact on CAREIT’s operations and value.
• Liquidity Risk: The announcement also cautions that CAREIT units are only tradable on the SGX-ST, and there is no guarantee of a liquid market for these units. Holders cannot request redemption or repurchase by the Manager while listed, reinforcing the need for investors to be aware of market and liquidity risks.

Strategic Implications

The acquisition of Epiisod Macquarie Park signals CAREIT’s commitment to expanding its student accommodation portfolio in Australia, leveraging its financial capacity and market expertise. The new facilities provide flexibility to fund both acquisition and ongoing capital expenditures, positioning CAREIT for potential growth and improved returns.

However, the embedded covenants and cross-default provisions present risks that shareholders should be mindful of, especially in scenarios involving changes to the management or ownership structure.

Forward-Looking Statements and Investor Caution

The announcement contains forward-looking statements regarding future performance, market trends, and strategic outcomes. Actual results may differ materially due to various risks and uncertainties. Investors are advised not to place undue reliance on these projections and to consider the inherent risks of investing in CAREIT units.

Disclaimer

This article is for informational purposes only and does not constitute investment advice, solicitation, or an offer to buy or sell any securities. Investors should carefully review the full prospectus and consider their own financial situation and investment objectives before making any investment decisions. The value of investments and income derived from them may fall as well as rise, and there are risks including loss of principal. Past or projected performance is not indicative of future results. Please consult a professional advisor before investing.

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