Centurion’s beds jumped seven-fold from 5,300 in 2010 to 40,362 in 2014

It plans to add 43,800 more in from FY15E-17E.

Greater competition in the domestic market has sent Centurion exploring opportunities in other countries and new segments.

According to a report by Maybank, Centurion’s beds jumped to 40,362 in 2014, up seven-fold from 5,300 in 2010. To sustain its growth, it plans to add 14,900/7,900/21,000 beds in FY15E/FY16E/FY17E.

As more competitors enter the market, land prices have risen and asset yields, fallen. In response, Centurion has been expanding into new countries and segments, such as student accommodation in Australia and the UK.

According to Maybank, Centurion is liked for its proven ability to extract good yields from unique, non-mainstream properties such as worker and student dormitories. There are some limitations, however. For one, overseas expansion comes with higher risks from forex translation and regulations.

Slowing imports of foreign workers could also impede growth at home. It may have to incur more funding costs by issuing medium-term notes to support its expansion.

Here's more from Maybank:

Moreover, a failure to renew the land lease for its Westlite Tuas dormitory when this expires in 2017 could shave 12% off our FY17E net profit.

On Jan 2015, it announced it was exploring the feasibility of listing a REIT for certain worker-accommodation assets. We think mature assets running at or near full occupancy such as Westlite Toh Guan, Westlite Mandai and several dormitories in Johor would be suitable.

We estimate Centurion could potentially raise SGD140.3m in REIT listing, assuming it retains 50% ownership of the REIT. 10% payout of the listing proceeds would translate to special DPS of 1.9SGD cts.