Centurion Accommodation REIT Issues 3.1 Million New Units for Management Fees

Key Developments Announced for CAREIT

• Centurion Accommodation REIT (CAREIT) has issued 3,104,558 new units at S\$1.121 per unit to Centurion Capital Investments Ltd. (CCIL), an entity nominated by Centurion Asset Management Pte. Ltd. (CAMPL).
• The new units were issued for the purpose of paying 100% of the base and performance management fees due to CAMPL for the initial period following the listing of CAREIT.
• The issue price was based on the volume weighted average price for CAREIT units traded on the SGX-ST over the 10 business days immediately prior to 31 December 2025.
• Following this issuance, the total number of issued units in CAREIT increases to 1,722,435,558.

Full Details of the Unit Issuance

The breakdown of the new unit issuance is as follows:

• Base Fee: 2,675,760 new units were issued as payment for the base fee, as previously disclosed in the CAREIT prospectus dated 18 September 2025. This base fee covers the financial period from the listing date (25 September 2025) to 31 December 2025.
• Performance Fee: 428,798 new units were issued as payment for the performance fee for the same period.

CAMPL elected to receive the entire management fee in units rather than cash, in line with options set out in the trust deed dated 12 August 2025. Notably, CAMPL has sold these units, which it was entitled to receive as payment, to CCIL (a related corporation), and directed that the units be issued directly to CCIL.

Key Points for Shareholders and Investors

• Potential Dilution: The issuance of new units increases the total number of units in issue, potentially diluting existing unitholders’ stakes.
• Manager’s Alignment: Management’s decision to receive 100% of fees as units rather than cash may signal confidence in CAREIT’s performance and growth prospects, but also means more units are entering the market.
• Transfer to Related Party: The new units have been transferred to a related entity, CCIL, which may be relevant for those monitoring related party transactions and potential overhangs.
• Prospectus Reference: All details of these fee arrangements and unit issuances were pre-disclosed in the IPO prospectus, reducing the likelihood of surprise for those who have studied those documents.

Other Important Information

• Liquidity and Trading: Holders of units can only trade them on the SGX-ST; there is no right to redemption by the manager. The listing does not guarantee liquidity.
• Risks: As highlighted by the manager, investments in the units are subject to risks, including possible loss of capital. Forward-looking statements in the announcement are subject to uncertainties and may not reflect actual outcomes.

Potential Market Impact

The new unit issuance, particularly to a related party, is a material event. While the arrangement was disclosed in the IPO prospectus, the actual transfer of a large block of units into the market could influence trading dynamics and sentiment. The move to issue units for fees, rather than cash, is often viewed as a sign of alignment but may also raise concerns about dilution or future selling pressure by the recipient entity. Shareholders and potential investors should monitor future disclosures regarding the holding and potential sale of these units by CCIL.

Disclaimer: This article is for informational purposes only and does not constitute an offer or solicitation to buy or sell any securities. Investments in REITs involve risks, including possible loss of principal. Please refer to the full CAREIT prospectus and seek professional advice before making investment decisions. The value of units and income from them may fluctuate, and past performance is not indicative of future results.

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