Broker Name: CGS International Securities
Date of Report: January 21, 2026
Excerpt from CGS International Securities report.
Report Summary
- CGS International initiates coverage on Centurion Accommodation REIT (CAREIT) with an “Add” rating and a target price of S\$1.38, highlighting expected strong DPU growth of 27.4% in FY26 and 10.1% in FY27, underpinned by expanded bed capacity and sector tailwinds in Singapore, UK, and Australia.
- CAREIT’s portfolio includes purpose-built worker accommodation (PBWA) in Singapore and student accommodation (PBSA) in the UK and Australia, benefiting from robust demand, occupancy levels above 95-97%, and supply-demand imbalances, especially in student housing.
- Recent regulatory approvals and asset enhancement initiatives, such as the expansion at Westlite Mandai and Toh Guan, support higher than anticipated earnings and offset future capacity declines from regulatory compliance.
- CAREIT’s assets are well-located, mostly on long-term leases or freehold, and managed by a reputable sponsor (Centurion Corporation), ensuring operational excellence and financial flexibility (31% gearing post-acquisition).
- Risks include potential changes in dormitory standards, non-renewal of leases for PBWA, policy changes affecting foreign students, and regulatory/title risks in certain markets.
- The REIT is committed to 100% payout of distributable income for FY26-27F and offers one of the highest projected DPU yields among S-REITs, with potential for further growth via acquisitions and asset enhancements.
Above is an excerpt from a report by CGS International Securities. Clients of CGS International Securities can be the first to access the full report from the CGS International Securities website: https://www.cgs-cimb.com
