Centurion Explores REIT IPO as Singapore Property Trusts Look to Rebound

Centurion turned Hong Kong’s Cheung Chi Hang Building into worker accommodation (Image: Google)

Singapore’s Centurion Corp is considering the launch of an SGX-listed REIT, potentially braving an initial public offering after a lacklustre 2024 for the market’s property trusts.

The REIT’s portfolio would comprise some of the developer’s student and worker housing assets, Centurion said late Tuesday in a filing with the Singapore Exchange. The trust would be sponsored by the company, which is working with DBS Bank and the UBS Singapore branch on the plan.

“The details, including the terms and the timing of the proposed transaction, are currently being explored,” Centurion said. “The proposed transaction will be subject to, among other things, market conditions, commercial negotiations and the relevant regulatory, shareholders’ and other approvals being obtained and the execution of definitive agreements by the relevant parties.”

Centurion’s SGX-listed shares rose 3.7 percent Wednesday on the news to close at S$1.00 ($0.73). The announcement comes after the benchmark iEdge S-REIT Index delivered a total return of minus 6.1 percent, inclusive of distributions, last year as high interest rates battered the market. After the US Federal Reserve cut interest rates three times in the final months of 2024, and with analysts expecting at least one more reduction next year, some analysts are anticipating a stronger year for Singapore REITs in 2025.

Resilient Yields
Centurion has enjoyed nearly full occupancy and positive rental reversion at its Singapore facilities on the back of an increase in infrastructure projects, chief investment officer Ho Lip Chin said at the Mingtiandi Singapore Forum in November. The company is also achieving tight vacancy in its student housing portfolio in Australia, Britain and the US amid a post-pandemic surge in student enrolments.

Centurion Corp chief investment officer Ho Lip Chin

“In terms of investment yield, workers accommodation and student accommodation have been resilient and delivering to us very good returns over the years,” Ho told the audience at the event. “The living sector has attracted quite a bit of attention … because of fundamental underlying demand and supply dynamics, it will continue to do well.”

Centurion currently operates over 65,000 beds across its portfolio, having recently ventured into Hong Kong and mainland China.

The company entered the Hong Kong student housing market in the first half of 2024 with a pair of master-leased properties the developer refurbished. The two assets — the 66-bed Dwell Prince Edward and the 89-bed Dwell Ho Man Tin — are situated in Kowloon and began operations in September.

In July, the group secured a third master lease for a 550-bed worker housing facility in the New Territories, known as Westlite Sheung Shui, which opened in November.

FHT Out in Front
Last year’s top-performing S-REIT in Singapore dollar terms was Frasers Hospitality Trust with a total return of 24.3 percent, followed by Keppel DC REIT (20.6 percent), Stoneweg European REIT (20.2 percent), Elite UK REIT (19 percent) and Manulife US REIT (15.3 percent), according to SGX research analyst Emelia Tan.

In terms of fund flows, institutional investors recorded net outflows of S$1.6 billion while retail investors recorded net inflows of S$1.6 billion, per Tan’s calculations.

Among key Asia Pacific markets, Australian REITs generated a 13.4 percent total return while Japanese and Hong Kong REITs suffered negative total returns of 11.3 percent and 19.7 percent respectively, the analyst said.

With interest rates coming down in many markets around the globe, analysts see Singapore’s REIT sector enjoying happier days in 2025.

“Fed rate cuts will continue albeit at a gradual pace and the MAS (Monetary Authority of Singapore) could change its policy stance in January,” analysts from Malaysia’s Maybank said in a report last week. “The rate cuts, along with the fact that the SREIT sector is trading at attractive yield spreads and Singapore continues to see safe-haven flows, should benefit a defensive sector like SREITs.”