Broker: Lim & Tan Securities
Date of Report: 19 August 2025
Centurion Corporation’s Record-Breaking Growth: New REIT Spin-Off, Dorm Expansion, and Premium Student Housing Brand Power 2025 Outlook

Overview: Centurion Delivers Above Expectations and Eyes Transformational Moves

Centurion Corporation has released its 1HFY25 financial results, outperforming forecasts with robust revenue and profit growth. The company’s strength in Singapore’s construction-driven market, expansion in Australia’s student accommodation sector, and bold plans to spin off key assets into a new REIT are setting the stage for a substantial value unlock for shareholders.

Financial Highlights: Strong Growth and Dividend Upside

Centurion’s first half fiscal year 2025 results came in above expectations, with revenue and core profits reaching 53% and 55% of full-year forecasts, respectively. The company cited positive rental reversions across all markets and new contributions from Westlite Ubi, offset slightly by weaker occupancy rates in Malaysia and Australia.

The interim dividend was raised to 2.0 Singapore cents, representing a 29% payout ratio and an annualized yield of 2.3%.

Strategic Moves: REIT Spin-Off to Unlock Value

Centurion is advancing a major spin-off of selected workers and student accommodation assets into a new REIT, targeted for completion by end-September 2025. The initial REIT portfolio will include:

• 5 Purpose-Built Workers Accommodation (PBWA) assets in Singapore
• 8 Purpose-Built Student Accommodation (PBSA) assets in the UK
• 1 PBSA asset in Australia

A further PBWA asset (EPIISOD Macquarie Park in Sydney) will be added after its completion. The REIT will distribute 100% of income semi-annually until FY27, then at least 90% subsequently.
Centurion expects to receive S$1.18 billion in divestment consideration (S$687 million in REIT units, S$497 million in cash). The company will retain a c.45% stake in the REIT, with plans to distribute 5%-10% of this stake to shareholders via dividend-in-specie after its 2026 AGM. This asset-light strategy aims to generate recurring income and enhance investor confidence.

Balance Sheet Transformation and Capital Recycling

The REIT spin-off is set to significantly lower Centurion’s net leverage ratio, strengthening its balance sheet. Recent years have seen notable capital appreciation in PBWA and PBSA assets due to strong rental reversions and high occupancy rates. The sale and recycling of these assets will crystallize gains and redeploy capital for further growth.

Valuation Uplift: SOTP Methodology and Target Price

Lim & Tan Securities has revised Centurion’s core earnings forecast upward by 6% for FY25F and 4% for FY26F, reflecting stronger operational performance. The valuation methodology has shifted from P/E to Sum-Of-The-Parts (SOTP), factoring in Centurion’s effective stake in the REIT and its remaining assets.

The new target price is S$2.00 (previously S$1.20), implying a 17% upside from the current share price of S$1.71.

Market Position and Shareholder Structure

Centurion’s dominance in Singapore, which accounts for 70% of revenues, is underpinned by robust construction demand. Major shareholders include Centurion Properties (50.6%), Loh Kim Kang David (7.9%), Teo Peng Kwang (7.6%), and Han Seng Juan (4.1%). The company has 840.8 million shares outstanding and a market capitalization of S$1.44 billion.

Key Financials: Past, Present, and Forecasts

Bed Pipeline: Expansion Across Key Markets

Centurion is aggressively expanding its bed capacity with finalized developments totaling 5,970 workers accommodation beds and 2,051 student accommodation beds. This pipeline is set to boost Centurion’s capacity by approximately 12% over the next two years. The company is also exploring a potential 7,000-bed project in Nusajaya, Iskandar, Johor.

Setting New Standards: Westlite Ubi and Premium Student Housing

Centurion’s newly launched Westlite Ubi, which reached full occupancy in just four months, demonstrates the company’s ability to meet and exceed new dormitory standards ahead of schedule. The ongoing demand in Singapore’s construction sector is projected to fuel further growth for dormitory operators.

Premium Brand Launch: EPIISOD Student Accommodation

Centurion is launching its premium student housing brand EPIISOD, aimed at redefining student accommodation globally. The first EPIISOD property, Macquarie Park in Sydney, is set to open in February 2026, offering 732 rooms with luxury amenities such as a rooftop infinity pool, wellness centre, and modern communal spaces. Centurion owns a 25% stake in the property, which will be injected into the REIT post-IPO.
The brand is expected to expand to at least four more sites in Melbourne and Perth, enhancing Centurion’s presence in Australia’s student accommodation market. The company currently owns two student accommodation properties in Australia: dwell Village Melbourne City (597 beds, with an additional 600 beds in 1Q26) and dwell East End Adelaide (300 beds).

Peer Comparison: Centurion’s Competitive Edge

Centurion stands out among its peers in terms of market cap, stock performance, and return on equity. Below is a comparison of key listed companies in the sector:

Centurion’s return on equity (29.9%) and market performance stand out, while peers like Wee Hur Holdings offer higher dividend yields.

Conclusion: Centurion Positioned for Continued Outperformance

Centurion Corporation’s strong operational momentum, strategic REIT spin-off, ambitious expansion pipeline, and premium branding initiatives position it as a leader in the accommodation sector. Investors are set to benefit from value crystallization, enhanced dividends, and upside potential as Centurion leverages construction demand, capital recycling, and global student housing trends.
With a newly raised target price of S$2.00 and a recommendation to “Accumulate on Weakness”, Centurion is well-placed for growth and shareholder returns in the years ahead.