Centurion mulls establishing a dormitory REIT

This will just be a short-term catalyst.

Centurion Corporation is mulling the establishment of a dormitory REIT by injecting some of its workers’ dormitory accommodation assets and list it on the Main board of the Singapore Exchange.

OSK DMG states that while details on which assets are to be included are still under consideration, the REIT is expected to consist mainly of Centurion’s Singapore dormitories.

“We think that this would be a short term positive catalyst for Centurion as it will allow the company to lower its gearing ratio massively which has shot up due to its recent acquisitions. In addition, depending on the price and yield the REIT is listing at, it will allow Centurion to fully realize its gains on its accommodation investments and enable Centurion to recycle capital to pursue other potential investments and opportunities," stated OSK DMG.

Here's more from OSK DMG: 

We expect the REIT to list at a yield of around 7-8% which would allow Centurion to potentially realize massive gains on its accommodation assets.

Lastly, the REIT will also act as a platform for investors who are seeking for stable dividend payouts as compared to strong growth and those who prefer the latter can continue to invest in Centurion Corp.

We also expect the company to payout a special dividend to reward shareholders if the REIT listing goes through.