Trying to breakdown Centurion Accommodation Reit IPO in less than 1 hour (My thoughts)

As the title suggest, i will be going on holiday soon so i took a glance at the Centurion Accommodation Reit IPO and i will give my thoughts.

I will write the conclusion which is i prefer the parent but i think that the REIT is passable for short term flipping.

These are just some of my observations that i read from the prospectus

WALE is short : Less than 1 year

7.47% Yield and 8.11% Yield based on price of $0.88

Around 73% of Net Property Income Estimation for FY 2026 comes from Singapore. Around 15% is from UK while around 12% is from Australia.

I think this is actually the most important page of the whole IPO Prospectus. 

Do we think that 2026 projections are realistic or achievable? To assess this, i think we should review the bed prices.

Based on my estimations, these are the bed prices

From what i am seeing, Westlite Dorms seems to be going for $600 - $630 currently so this amount is possible.

What about 2027?

This assumes beds will go up by around 6% in rental as a whole. Personally i think its too early to tell but my imaginary ceiling is that beds can not go above $650 cause this will mean workers can just stay in the budget hotels which has been popping up as alternatives.

3 Reasons why i think this IPO should be above water

1) Yield is attractive especially with the rate cut news. 

2) UK Student Housing is probably the one to watch. This year it is expected to deliver 4% rental growth as seen in major players Empiric Students Property and Unite Group. Given conservative estimates (~1%) from 2026 to 2027, this space might surprise.

3) Size of the Reit would make the Equity Market Development Program Ideal. Around 1.5 billion would be a size that would attract mid cap investors.

3 Reasons to be wary of this IPO

1) Short WALE means that rental actually has to be tracked closely. While supply takes time to enter market, external shocks that might affect the construction and related industries for workers would quickly send the revenue down. As such, there is a need to be kept abreast of the price at least

2) Looking at the 7+% yield, a simple assumption of PE of around 13 to 14? Its worth noting that the construction sector has always been cyclical and say this boom last for 5-6 years due to terminal 5 etc.....is this actually sustainable in the long run?

3) Priced to Perfection. The occupancy rate, rental prices, property value appraised and sale from parent to reit. It gives the feel of being perfectly priced and it is. Any further upside to the share price would only come from uplift of rental markets / no compelling attractive yield due to interest rate falling even quicker / 2030 Dorm restrictions forcing a huge shrink in current supply / good acquisition made using debt.

Conclusion: I prefer the parent in the long run due to the short leases workers dormitory and it will be more light asset following the spin off. I don't think construction demand will drop in 2026 2027 but i don't think rates can ever punch above 650 by 2027. Therefore, to record another 20-30% rental revision across 2-3 years seem rather impossible.

With that said, its Singapore, there are probably more experts in rental / housing  than myself so this is just my short and rushed views.

Apologies for any mistakes made in the analysis.