• Centurion Accommodation Reit was spun off from Centurion Corporation in Sept 2025, listing a portfolio of 14 purpose-built worker and student housing assets in a S$1.8 billion IPO on SGX. •The spinoff at 88 cents / share was hugely popular—the institutional placement tranche was oversubscribed more than 16 X while the retail tranche, 30.9 X.  • The IPO created Singapore’s first pure-play accommodation REIT promising long-term and resilient cashflows. Support from Centurion’s experienced team and a pipeline of assets mean there’s plenty of room for expansion and enhanced returns down the road. • If you’re into resilient, income-generating real estate with some geographical diversification, this REIT is worth a closer look. • UOB Kay Hian's initiation report this week recommends a buy with a target price of $1.23. Read excerpts of UOB KH's report .... |
Excerpts from UOB KH report
Analyst: Adrian Loh
Centurion Accommodation REIT (CAREIT SP)
Accommodating Income- And Growth-Minded Investors
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Highlights • CAR is Singapore's first pure-play purpose-built living REIT, with 14 high occupancy PBWAs in Singapore and PBSAs in the UK and Australia.
• It has a strong sponsor in CCL (Centurion Corp) and a robust ROFR (right of first refusal) pipeline, and benefits from resilient, supply-constrained markets, long leases, and a highly experienced management team. |
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| Analysis |
• First and only pure-play living accommodation REIT with global diversification. Centurion Accommodation REIT (CAR) is Singapore's first and only purpose-built accommodation REIT, offering exposure to resilient purpose-built workers' accommodation (PBWA) and purpose-built students' accommodation (PBSA) assets across Singapore, the UK, and Australia.
Its high-occupancy (PBWA: 99.2%, PBSA: 98.2%) and balanced portfolio of 14 assets, which will rise to 15 by early-26, anchors steady and visible income growth. 
Centurion CEO Kong Chee Min guiding analysts and media through the new Westlite Ubi workers' accommodation just prior to the REIT spin-off.
• Strong growth momentum backed by essential demand and strategic pipeline. The robust sector fundamentals, given the tight PBWA supply in Singapore and expanding PBSA markets in the UK and Australia, drive multiyear revenue visibility in our view.
Supported by an 11% projected NPI uplift by 2026 and long WALE (>30 years for 84% of assets), CAR offers durable cashflows and embedded capital appreciation potential.
• Backed by Centurion Corporation with ROFR-driven growth and prudent gearing. CAR will have access to Centurion Corp's (CCL) pipeline via a right of first refusal (ROFR).
Importantly, CAR's low initial leverage (20.9%, rising to 31% post-Sydney acquisition) provides ample debt headroom, reinforcing both income stability and scalable future expansion.
• Initiating with a BUY recommendation and a target price of S$1.23. We value CAR at S$1.23 based on a dividend discount model (DDM) with forecast dividend yield of 6.2% for 2026 and 7.2% for 2027 (required return: 8.0%; growth rate: 2.8%). 
This property has 2- and 3-cluster bedrooms with shared kitchen and bathroom facilities. It's located just a short walk from the University of Manchester's main campus. Supermarket amenities operated by Morrisons are available at the property.
• A balanced portfolio with multiple growth drivers. CAR’s strategic diversification across complementary accommodation segments and geographies has created a balanced portfolio that benefits from multiple growth drivers while mitigating market-specific risks.
The REIT's initial portfolio of 14 assets demonstrates exceptional operational performance with weighted average occupancy rates of 99.2% for PBWA properties and 98.2% for PBSA properties in 2024, reflecting the essential nature of these accommodation assets and management's operational expertise, in our view.
• Its expanded portfolio includes: a) the acquisition of an additional 732-bed PBSA asset in Sydney, Australia; and b) an increase in the capacity of Westline Mandai PBWA by up to 1,980 beds.
On our estimates, this would see an 11.1% yoy uplift in net property income in 2026. On an appraised value basis, these two projects would increase the initial portfolio by 15.3% to S$2,118b.
• Long WALE for its key assets. CAR’s portfolio, where more than 84% of assets are freehold or have leaseholds exceeding 30 years, faces less risk of near-term lease renewals or renegotiations, which can be costly and uncertain.
This stability ensures consistent rental income streams, as seen in the REIT's high occupancy rates (2024: 99.2% for PBWA and 98.2% for PBSA), supported by long-term tenant contracts.
Additionally, we believe that longer leases mitigate the impact of market volatility, as rental rates are locked in for extended periods, shielding investors from short-term economic fluctuations.
• The Singapore PBWA market has demonstrated impressive growth, expanding to S$3.7b in 2024 at a five-year CAGR of 13.1% over 2019-24, with projected continued growth at a 10-year CAGR of 9.7% through 2029.
This growth is underpinned by:
| a) ongoing dependence on foreign workers in the country’s construction, marine, and process (CMP) sectors; b) increased regulations phasing out lower-quality accommodations and driving demand for quality PBWAs that meet Ministry of Manpower (MOM) standards; and c) supply constraints due to potential non-renewal of leases for up to 104,860 beds from 2025-29 and the withdrawal of beds for retrofitting works to comply with mandatory living standards by 2030. |
• UK and Australia PBSA markets have seen robust demand-supply dynamics. Both markets have benefitted from growing international student populations, limited on-campus housing supply, and, in our view, increasing student preference for purpose-built accommodations with modern amenities and community-focused living experiences.
• Initiate coverage with BUY and DDM-based target price of S$1.23.  Adrian Loh, analystOn our estimates, the company provides a 2026F distribution yield of 6.2% which is 0.5ppt above the average of our Singapore REITs coverage universe. Our base-case DDM valuation assumes a 2026 distribution of S$0.066 based on its enlarged portfolio, terminal growth rate of 2.8% and a required return of 8.5%. Using a DDM to value CAR is in line with UOB Kay Hian’s coverage of Singapore REITs. Share Price Catalysts • DPU-accretive acquisitions in the PBSA and PBWA businesses. • Execution of its acquisition of Epiisod Macquarie Park by early-1H26. |
→ Full UOB KH report here.
→ See also: From Sunset Industry to Sunrise REIT: Centurion's Winning Pivot over 14 Years
