Centurion Accommodation REIT (CAREIT) FY2025 Financial Results: Detailed Investor Analysis

Key Highlights

• Strong Outperformance Against Forecasts: CAREIT recorded gross revenue of S\$50.7 million for the financial period from 25 September 2025 to 31 December 2025, a 3.4% increase over forecast. Net Property Income (NPI) stood at S\$36.1 million, beating forecasts by 4.1% due to higher rental rates and occupancy across both the Purpose-Built Workers Accommodation (PBWA) and Purpose-Built Student Accommodation (PBSA) portfolios.
• Distribution Per Unit (DPU) Surpasses Forecast: Actual DPU was 1.739 cents, up 6.7% compared to forecasted 1.630 cents for the same period. Annualised distribution yield was 5.84% based on closing price of S\$1.11 per unit, and would have been 7.36% if calculated based on the IPO price of S\$0.88 per unit.
• High Portfolio Occupancy: PBWA portfolio occupancy was 97.6% (up 1.8 ppt), while PBSA portfolio occupancy was 99.1% (up 1.8 ppt), indicating robust demand and efficient management.
• Capital Management: Aggregate leverage stood at 30.7% (up from 22.1%), with significant debt headroom (S\$348.0 million at 40% gearing). Weighted average financing cost was 3.46% and interest coverage ratio was a healthy 6.60x. Notably, no debt matures until FY2028.
• Portfolio Expansion: Recent developments include completion and licensing of new blocks at Westlite Toh Guan and Mandai, with further bed expansions pending approval. Acquisition of Epiisod Macquarie Park (732 beds, Australia) was completed in January 2026, funded fully by committed loan facilities.
• Industry Recognition: CAREIT received several awards, including Singapore Capital Markets Deal of the Year, Best IPO Award, and significant sustainability certifications.
• Index Inclusion: CAREIT was included in multiple indices, such as SGX iEdge Singapore Next 50 Index and MSCI Singapore Small Cap Index, boosting visibility and potential institutional flows.

Potential Price Sensitive Information & Shareholder Considerations

• Distribution Yield and DPU Outperformance: CAREIT’s ability to outperform forecasted distributions, alongside high occupancy rates, suggests stronger than expected earnings power. This is likely to attract investors seeking stable, high-yielding REITs.
• Debt Profile and Expansion: The increase in aggregate leverage to 30.7% reflects recent acquisitions and expansions, but the strong interest coverage ratio and substantial debt headroom mitigate refinancing risks. No debt matures until FY2028, providing stability.
• Portfolio Growth and Asset Enhancements: New bed additions and block developments at Westlite Mandai, Toh Guan, and Ubi could drive further rental income growth. Pending regulatory approvals for expanded capacity represent near-term catalysts.
• Master Lease Structure (Australia): The Epiisod Macquarie Park acquisition comes with a master lease in place until end 2027, guaranteeing fixed rental income (A\$14.1m in FY2026, A\$20.0m in FY2027).
• Sector Concentration and Tenant Diversification: 79% of PBWA revenue is from construction, but top 10 tenants contribute just 7.26% of gross rental income, minimising concentration risk. PBSA portfolios are diversified both by nationality and study level.
• Resilient Market Outlook: Singapore’s construction sector is forecast to remain strong, supporting high demand for foreign worker accommodation. UK and Australia student accommodation markets are experiencing robust domestic and international student growth, with supply lagging demand.
• Potential for Further Accretive Acquisitions: CAREIT’s sponsor, Centurion Corporation Ltd, holds a significant 42.8% stake, providing alignment and pipeline visibility. The sponsor has granted a Right of First Refusal (ROFR) for assets falling within CAREIT’s investment mandate.
• Regulatory Approvals as Near-Term Catalysts: CAREIT awaits further licensing and regulatory approvals for expanded capacity at key properties. Successful approvals could unlock additional rental streams and asset value.
• Valuation Uplift: Portfolio valuation as at 31 December 2025 is S\$1.88 billion, reflecting increases at key assets following expansion approvals and development completions.
• Index Inclusion and Analyst Coverage: CAREIT’s inclusion in multiple indices and coverage by six rated analysts may drive greater investor awareness and institutional flows.

Detailed Financial Performance

Portfolio Overview

• CAREIT operates 14 properties across 3 countries (Singapore, UK, Australia) with c.25,154 beds.
• Occupancy rates remain high (PBWA: 97.6%, PBSA: 99.1%).
• Recent expansions and acquisitions (Epiisod Macquarie Park, Westlite Mandai/Toh Guan/Ubi) add further growth potential.
• Portfolio valuation grew to S\$1.88 billion, with SG assets accounting for 77.06%, UK 20.13%, and Australia 2.81% by value.
• Lease tenures are robust, with 84.5% of assets having >30 years remaining tenure.

Capital Management

• Aggregate leverage is 30.7%, comfortably below regulatory limits.
• Weighted average financing cost is 3.46%, with 55.8% of debt at fixed rates.
• Debt maturity profile is favourable, with no maturities until FY2028.
• Debt is drawn in local currencies, providing a natural hedge against FX risks.
• Debt headroom offers substantial capacity for future acquisitions and expansions.

Market Outlook

• Singapore: Construction sector demand is robust, with foreign worker permits at record levels. Regulatory changes (Dormitory Transition Scheme) and land constraints are expected to support rental rates and occupancy for migrant worker accommodation.
• UK: Student accommodation demand is driven by domestic-led growth, with moderate supply increases. International student flows remain positive.
• Australia: International student demand is accelerating, outpacing supply and leading to structural undersupply in student accommodation.

Strategic Framework

• CAREIT’s strategy includes proactive asset management, prudent capital and risk management, and accretive acquisitions from both sponsor and third parties.
• Investment mandate covers global income-producing PBWA, PBSA and other accommodation assets (excluding Malaysia).
• Strong alignment and pipeline visibility via sponsor Centurion Corporation’s 42.8% stake and ROFR on future assets.

Industry Recognition and Analyst Coverage

• CAREIT has achieved several industry awards, sustainability certifications, and is included in major indices (SGX iEdge, MSCI, FTSE ASEAN, Morningstar), enhancing visibility and attractiveness for institutional investors.
• Six rated analyst coverage further supports transparency and investor confidence.

Distribution Details

• DPU: 1.739 Singapore cents for period 25 September to 31 December 2025
• Ex-Date: 2 March 2026; Record Date: 3 March 2026; Payment Date: 31 March 2026
• Distribution comprises taxable income, tax-exempt income, and capital return.

Conclusion

CAREIT’s FY2025 results present a compelling picture of robust performance, operational excellence, and strategic growth. The REIT has outperformed forecasts, expanded its portfolio, secured high occupancy, and maintained prudent leverage. Pending regulatory approvals for further bed expansions and asset enhancements, along with potential accretive acquisitions via the sponsor pipeline, provide further upside catalysts. Industry recognition, index inclusion, and analyst coverage are likely to boost investor confidence and visibility.

Investors should closely monitor regulatory approvals for expanded capacity, as these may unlock further value and drive future DPU growth. The favourable outlook for accommodation sectors in Singapore, UK, and Australia further reinforce CAREIT’s growth trajectory.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. The information herein is based on publicly available data and the CAREIT financial report. Actual performance may differ due to market, regulatory, and operational risks. Investors are advised to conduct their own due diligence before making any investment decisions.

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