• Centurion Accommodation REIT came about pretty recently — it was spun off from Centurion Corporation in September 2025. This new REIT, which is one of a kind on the SGX, owns a bunch of purpose-built housing for workers and students -- property which is in great demand. • Its IPO at 88 cents / share was hugely popular—and the REIT traded at $1.04 recently.  • Analysts are giving it the thumbs up. UOB Kay Hian recommended a buy with a target price of $1.23 for Singapore’s first pure-play accommodation REIT. • A week later, DBS Research followed up with a buy recommendation too, and a higher $1.30 target. Why? With historical occupancy over 97%, and plenty of growth planned, the REIT's income looks strong and reliable. • Read excerpts of DBS' report below .... |
Excerpts from DBS Research report
Analysts: Geraldine WONG & Derek TAN
Centurion Accommodation REIT (CAREIT SP)
Bedrock of essential housing
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Highlights • Essential lodging portfolio in strategic locations, with robust demand-supply dynamics stemming from tightening of dorm regulations (PBWA) and high student-to-bed ratios in UK, Australia
• Unmatched growth with estimated 15% CAGR in DI (distributable income) from FY25- 27, driven by a 35% growth in beds, includes anticipated interest cost savings and Mandai Expanded Capacity (MEC) |
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| Investment Thesis |
Bedrock of essential housing. Centurion Accommodation REIT (“CAREIT”) is the first pure-play purpose-built accommodation REIT to list globally, with an enlarged portfolio of SGD2.1bn across 15 assets.
CAREIT provides direct exposure to Singapore’s resilient purpose-built worker accommodation (PBWA) sector, with c.64% of the IPO portfolio anchored to benefit from Singapore’s structurally tight worker housing landscape.
This is evidenced by a tight foreign worker-to-PBWA bed ratio of c.4.0x, and rising demand for foreign labour driven by the URA Master Plan’s focus on construction growth and urban renewal.
High historical occupancy of >97% and short one-year leases offer defensive income visibility with the ability to capture organic growth.
Unmatched in terms of growth. We forecast a 15% CAGR in distributable income from FY25-27F, driven by a 35% expansion in total beds as new blocks at Toh Guan and Mandai, ramp-up of Westlite Ubi, and the acquisition of Epiisod Macquarie Park progressively come online.
Post-acquisition gearing of c.31% provides healthy debt headroom of c.SGD561mn (on a 45% limit), offering flexibility to pursue the sponsor’s right of first refusal (ROFR) pipeline or to unlock further value through redevelopment within existing PBWA assets, to drive medium-term growth beyond the current projection horizon.
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.
Bed reversions the real delta. CAREIT will be the only S-REIT to fully lock in current dovish interest costs.
Debt costs could come in c.50bps lower at 3.50% from IPO underwriting.
Reversions could surprise on the upside which we view as the real delta for distribution per unit (DPU).
A 5% reversion achieved (instead of 3% at underwriting) will have a direct flow-through to the bottom line and add another 5% to DPU estimates.
Initiate with BUY with TP of SGD1.30. We price in lower interest cost and the MEC catalyst into our numbers and expect a first full-year FY26F DPU of 6.90 Scts and 7.63 Scts in FY27F (+11% y/y). Our TP is based on a 7.3% WACC, a 1.0 beta, and 2.0% terminal growth rate. Key Risks Higher-than-expected supply within either operating segment |
→ Full DBS report here.
→ See also: From Sunset Industry to Sunrise REIT: Centurion's Winning Pivot over 14 Years
