Broker Name: Maybank Research Pte Ltd
Date of Report: November 27, 2025
Excerpt from Maybank Research Pte Ltd report.
Report Summary
- Centurion Accommodation REIT (CAREIT) is the first pure-play purpose-built living accommodation REIT listed on SGX, with exposure to purpose-built worker accommodation (PBWA) in Singapore and purpose-built student accommodation (PBSA) in the UK and Australia.
- Maybank initiates coverage with a BUY rating and a target price of SGD1.27, implying a forecasted yield of about 5.7% in FY26, backed by a projected distributable income CAGR of 13.8% over FY25-27.
- CAREIT’s growth is driven by assumed 3% annual rent reversions, asset enhancement initiatives (AEIs) to boost bed count, and the acquisition of Epiisod Macquarie Park in Australia, expected to complete in 2026.
- Portfolio resilience is supported by strong occupancy rates (around 97% for both PBWA and PBSA assets), diversified tenant base, and limited supply in the markets served, especially in Singapore due to regulatory upgrades.
- The REIT benefits from a strong sponsor (Centurion Corporation), which is the largest worker accommodation operator in Singapore, providing a robust acquisition pipeline and operational expertise.
- Key risks include macroeconomic uncertainties, regulatory changes, interest rate volatility, and potential delays in project completion or tenant renewals.
- Financially, CAREIT is conservatively geared (expected 31% post-acquisition), with ample debt headroom and a policy to distribute 100% of its distributable income until FY27.
- There is potential upside to distributions per unit (DPU) from lower-than-expected financing costs and stronger rental growth, particularly given ongoing construction demand and bed shortages in Singapore.
- The REIT’s initial portfolio is diversified by sector and geography, with 73% in Singapore PBWA and 27% in UK/Australia PBSA, and most assets are freehold or long leasehold.
- The outlook for both PBWA and PBSA sectors remains positive, driven by continued infrastructure development in Singapore and strong student demand in the UK and Australia.
Above is an excerpt from a report by Maybank Research Pte Ltd. Clients of Maybank Research Pte Ltd can be the first to access the full report from the Maybank Research Pte Ltd website: https://www.maybank.com/investment-banking
