Centurion Accommodation REIT (CA-REIT) has officially launched its initial public offering (IPO).
Important Dates and How to Apply
IPO Opens: September 18, 2025, 10:00 pm
IPO Closes: September 23, 2025, 12:00 pm
Trading Commences: September 25, 2025, 2:00 pm
Applications can be made via DBS/POSB, OCBC, UOB ATMs and digital channels, or using printed forms accompanying the prospectus.
This marks a significant milestone for both the sponsor, Centurion Corporation Limited (CCL), and the broader accommodation-focused real estate investment trust (REIT) landscape. The IPO offers 262.16 million units at an issue price of S$0.88 per unit, structured into an international placement tranche of 248.96 million units and a public tranche of 13.2 million units. This follows overwhelming shareholder approval of the spin-off at CCL’s extraordinary general meeting on 10 September, after the company first announced its intention to explore a listing in January 2025.
Investor confidence in the offering has been strong, underscored by commitments from cornerstone investors who subscribed to 614 million units. This cohort includes leading global and regional names such as FIL Investment Management, abrdn Asia, Barings Singapore, Lion Global Investors, UBS, and Value Partners. In parallel, Centurion Capital Investments has entered into a separate agreement with the REIT manager to take up 414.37 million units, highlighting the sponsor’s long-term commitment to the listed entity.
CCL Divestment & benefits to current shareholders
At the heart of CA-REIT’s appeal is its diversified and income-generating portfolio. The REIT will debut with 14 properties spanning three countries: five purpose-built worker accommodation (PBWA) assets in Singapore, eight purpose-built student accommodation (PBSA) assets in the United Kingdom, and one PBSA asset in Australia. Together, these assets represent over 24,000 beds and a portfolio valuation of approximately S$1.72 billion. Growth is already built into the pipeline, with the planned acquisition of Epiisod Macquarie Park in Sydney, a 732-bed student accommodation property expected to be completed in early 2026. This forward purchase will be fully debt-funded, lifting the portfolio to 27,602 beds across 15 properties with an enlarged valuation close to S$2.0 billion.
The transaction allows CCL to deleverage, create additional debt headroom, and generate recurring income streams through the continued management of REIT assets by its subsidiaries.
Total expected proceeds: S$1.21 billion
- S$516.7 million in cash
- S$693.0 million in Sponsor Units
- CCL to retain approximately 45% stake in the REIT
A portion of these units will be distributed to shareholders as a dividend in specie, offering them direct participation in the new listed entity. The cash proceeds will be used to repay debt, fund development projects, and support future acquisitions, positioning CCL for sustainable growth while maintaining alignment with investors through its significant retained interest in the REIT.
Shareholders also stand to benefit from an estimated gain of S$15.5 million arising from the divestments, while continuing to enjoy indirect upside through CCL’s ongoing role as sponsor and manager of the REIT. Management fees from REIT operations, along with property management income across Singapore, the UK, and Australia, provide CCL with stable recurring earnings, which ultimately benefit its shareholders.
The vote in favour was driven by several compelling reasons:
- Tax transparency: Distributions to individual investors are generally not taxed; qualifying foreign investors enjoy a reduced 10% withholding tax.
- Asset-light strategy: Spin-off frees up capital, lowers costs, and strengthens CCL’s balance sheet through deleveraging.
- Flexibility for shareholders: They can hold REIT units directly, benefit from 100% initial payout policy, and adjust exposure between CCL and the REIT.
- Value maximization: Listing monetizes assets at or near market value and provides CCL with more debt headroom for growth.
Financially, CA-REIT aims to deliver robust and attractive returns to its unitholders. Based on the offering price, projected distribution per unit (DPU) yields are 7.47% for 2026 and 8.11% for 2027. At listing, the leverage ratio is expected to stand at 20.9%, which will rise to around 31% following the Macquarie Park acquisition – still comfortably within regulatory limits and below our threshold of a well-managed REIT leverage ratio. The REIT has also committed to distributing 100% of its distributable income until 2027 and at least 90% thereafter, reinforcing its income appeal.
Furthermore, CA-REIT also benefits from a Right of First Refusal (ROFR) on CCL’s future PBWA and PBSA assets, ensuring a robust acquisition pipeline and sustained growth opportunities. Operational risk is mitigated through mechanisms such as master leases, guaranteed fixed rentals on newly completed assets like Epiisod Macquarie Park, and deferred purchase considerations where vendors bear construction overruns. These safeguards enhance both income visibility and investor confidence.
CA-REIT asset details (From Prospectus)
The establishment of CA-REIT is supported by strategic divestments from CCL and third-party vendors. Properties such as Westlite Toh Guan, Westlite Woodlands, Westlite Ubi, eight UK-based student accommodations, and dwell East End Adelaide in Australia are among the cornerstone assets of the REIT. Beyond acquisitions, organic growth will be driven by expansions at existing properties, including Westlite Toh Guan and Westlite Mandai, expected to complete between late 2025 and early 2026. Additional upside will come from development opportunities such as the Mandai expanded capacity project and the Phase 2 redevelopment at Toh Guan.
Why CA-REIT
From an investment perspective, CA-REIT offers several advantages. It provides direct exposure to accommodation sectors with resilient demand fundamentals – worker housing supported by Singapore’s labor market needs, and student housing underpinned by international education demand. Its tax-transparent structure further enhances distributions for individual investors. Importantly, CCL will retain a 35–45% stake in CA-REIT, aligning the sponsor’s interests with those of unitholders.
The listing also highlights the differentiated value proposition between CA-REIT and its sponsor. While CCL continues to operate as a broader accommodation solutions provider engaged in ownership, development, and management, CA-REIT represents a more focused, asset-light vehicle dedicated to delivering stable distributions from a high-quality property portfolio. For investors, this distinction offers choice: those seeking stable and predictable income may prefer CA-REIT, while those pursuing exposure to development and corporate growth may choose CCL.
In addition, CA REIT have a favourable fee structure as compared to other REITs in Singapore. Usually, asset managers are paid by a fraction of property value and net property income. CA REIT pays its managers 10% of DPI with 25% of the growth of its DPI year on year. Generally, this yields more shareholder value in total distributable income after fees and incentives managers to work hard.
Doing a simple calculation using CICT’s FY24 earnings number:
- CICT’s fee structure is 0.25% property value and 4.25% NPI , this will result in a reduction of about 111 million from distributable income.
- Following CA REIT’s fee structure, the distributable income would only decrease by about 84.4 million.
Next, the REIT is incentivised to improve AEI and asset managements. Its operational excellence in providing engagement and stimulating mentally well being to workers and students in its accommodations provides attractiveness in renewing leases. Furthermore, the tightness in supply of worker dorms allow for short leasing period and leverage for CA REIT to demand positive rental reversions. The facilities are also relatively new, with the management suggesting that 1 million per year of Capital expenditure is more than enough for near term operations.
Overall, the REIT offers dividend visibility into the future. With the government already marking out areas for developments like Kranji, Tengah, Woodlands and many other initiatives, there will be a huge demand for foreign workers. CA REIT stands to benefit and maintain high occupancy ratio for the foreseeable future. The company also have high financial stability with no debt due until 2028, providing a tangible goal of achieving distribution yield of 7.47% and 8.11% for projected year 2026 and 2027.
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