Panic selling: Centurion hits 90% occupancy in 2 dorms

Contrast to the belief that Singapore’s dorm business has dropped sharply.

Headwinds may be expected as additional thousands of beds will arrive, but these will only be temporary and Centurion’s dormitories will continue to add to its occupancy rates.

A report by RHB reveals that Centurion’s Mandai and Toh Guan dorms are close to full occupancy, and that there are an estimated 30k-40k beds from short-term leases which will expire in the next two years.

In addition, with the Singapore Government determined to move workers to purpose-built dormitories, RHB is optimistic that the impending headwinds would be temporary, especially since a proportion of foreign workers are still being housed in illegal accommodation, which signals the need for proper dormitories.

Here’s more from RHB:

With recent tender rates for dormitory land escalating, many construction peers are bidding for new dormitory land at a rental rate of around SGD80-160 per bed a month. Including construction costs and ramp-up/down period, their breakeven cost may exceed SGD280 per bed, which is significantly higher than that of Centurion. This, in our view, places Centurion in a prime and comfortable position ahead of its listed peers despite the upcoming headwinds.

With occupancy in its Malaysian operations improving >90% coupled with its Australia and UK student accommodation business, Centurion’s revenue will likely be more diversified going forward, which could help cushion a potential revenue decline in its Singapore dormitory business.