CGSI initiates coverage on Centurion Accomodation Reit with âaddâ, S$1.38 target price

[SINGAPORE] Analysts are turning bullish on the Centurion ecosystem, with CGS International (CGSI) initiating coverage on the newly listed Centurion Accommodation Reit (CAReit) while RHB and UOB Kay Hian see upside in its sponsor, Centurion Corporation.CGSI initiated coverage on CAReit on Jan 21 with an âaddâ rating and a target price of S$1.38, representing a potential upside from its trading price of S$1.10 at the time of CGSIâs report.CAReit was listed on the SGX mainboard in September last year, with an initial public offering (IPO) price of S$0.88 per unit.CGSI Analysts Li Jialin and Lock Mun Yee describe the counter as offering âhidden valueâ and being âprimed for growthâ. They project FY2026 and FY2027 distribution per unit (DPU) growth of 27.4 per cent and 10.1 per cent respectively, driven by operational bed capacity exceeding IPO forecasts.This growth is attributed to the accelerated addition of 1,980 beds at Westlite Mandai, expected to be operational by April 2026, and the retention of 664 beds at Westlite Toh Guan until late 2028.Â âWe like CAReit for its strong and visible DPU growth and potential for inorganic and organic opportunities,â the analysts said, noting that the Reit offers a FY2026 forecast dividend yield of 6.5 per cent.âMulti-year sector tailwinds, such as the construction upcycle in Singapore and robust demand for (purpose built student accommodation) in UK and Australia, are likely to underpin CAReitâs robust earnings outlook,â the analysts said.Â Parent company reratesMeanwhile, RHB has maintained âbuyâ on Centurion Corporation, and raised its target price to S$1.88 from S$1.86 on Jan 21.âWe remain positive on Centurion Corpâs prospects, as the group focuses on property development, acquisitions, and being CAReitâs manager post spin-off of its assets to the latter,â analyst Alfie Yeo said.Â The target price upgrade follows the completion of the divestment of Epiisod Macquarie Park to CAReit for approximately A$345 million (S$280 million).RHB increased its target price based on a higher sum-of-the-parts valuation, reflecting the slightly higher market valuation of its stake in CAReit. The brokerage also highlights potential future rewards for shareholders, noting that Centurion may declare another dividend in specie as it pares down its stake in the Reit next year.Centurion Corporation shares were trading at S$1.41 at the time of RHBâs report.Separately, UOB Kay Hian named Centurion Corporation a top pick in its construction sector update on Jan 20, with a target price of S$1.90.The brokerage maintains an âoverweightâ call on the construction sector, and notes that the industry is âset to outperform, with strong construction demand and order book visibility of two to four yearsâ.Since its previous construction sector note, âthe sector has undergone a meaningful valuation reratingâ, the brokerage said. This is driven by a construction upcycle supported by post-pandemic project catch-up and a new wave of infrastructure investments.

CGSI initiates coverage on Centurion Accomodation Reit with âaddâ, S$1.38 target price

CGSI initiates coverage on Centurion Accomodation Reit with âaddâ, S$1.38 target price