Centurion Corporation Limited announces new 5Y SGD senior green bonds at an IPG of 4.20%

• Centurion Corporation Limited (Centurion) intends to issue new SGD 5Y sustainability senior unsecured bonds at an initial price guidance (IPG) of 4.20% for accredited and institutional investors only. The bonds are expected to settle on 1 September 2026 and mature on 1 September 2031. The issuer is unrated, and this new issue is expected to be unrated as well. Net proceeds will be used to fund, finance, or refinance new or existing eligible green and social projects undertaken by the group.

• Centurion is a Singapore-listed owner, developer, and manager of purpose-built worker (PBWA) and student accommodation (PBSA), with a growing presence in build-to-rent (BTR) and key worker accommodations (KWA). As of 30 June 2026 (1H2026), Centurion’s portfolio comprised 43 PBWA, PWSA, BTR, and KWA assets with approximately 85,528 beds across Singapore, Malaysia, Australia, China and the UK. This includes 25 owned-and-operated assets (~53,118 beds), 15 assets held by Centurion Accommodation REIT (CAREIT), in which Centurion owns approximately 38.5%, one asset held through a private fund, and two third-party managed assets. Importantly, Centurion fully consolidates CAREIT into its financial statements, including earnings and debt.

• For 1H2026, Centurion reported revenue of S$184.9m, up 31% YoY from S$140.7m in 1H2025. Growth was driven by the consolidation of Westlite Mandai from September 2025, new operational beds coming online across the Singapore and Malaysia PBWA portfolio, and the January 2026 commencement of EPIISOD Macquarie Park in Australia. Sustained high occupancy and positive rental reversions across the overall portfolio also lifted gross profit by 34% YoY to S$146.0m.

• Reported net profit, however, fell 36% YoY to S$53.1m (1H2025: S$83m), largely reflecting a S$32.8m net fair value loss on investment properties and a S$4.2m loss from associated companies, partly reflecting the consolidation of Westlite Mandai. Excluding these fair value and one-off adjustments, profit from core operations rose 34% YoY to S$87.7m, highlighting the underlying operating strength of the business. Importantly for bondholders, operating cash flow (OCF) rose 50% YoY to S$104.7m. That said, free cash flow (OCF less organic capital expenditure, excluding acquisitions) eased to S$39.3m (1H2025: S$50.1m) due to higher renovation spending to upgrade its properties.

• Operationally, occupancy was mixed with PBWA average occupancy easing to 84% (1H2025: 90%) as newly delivered beds at Westlite Toh Guan and Westlite Mandai continued to ramp up. Malaysia also softened to 73% on foreign-worker quota caps. This was partly offset by stronger PBSA occupancy, which improved to 97% (1H2025: 93%) on UK and Australia strength. We view the near-term PBWA occupancy weakness as more of a ramp-up and timing issue rather than a deterioration in underlying demand. Committed occupancy at Westlite Toh Guan and Westlite Mandai had already reached 99% and 87% respectively by end-July 2026. Management has also guided for PBWA occupancy to trend higher towards a mid-90% range. Overall, we think Centurion continues to benefit from a diversified portfolio of accommodation assets across several markets.

• Leverage has increased meaningfully following its recent acquisitions, but debt-servicing capacity remains comfortable. Total debt rose to S$1.08b as of 30 June 2026 from S$705.5m (end December 2025), mainly due to S$472.7m of acquisition spending, including EPIISOD Macquarie Park. Do note that for these figures, the non-REIT owes only S$418.2m, with the outstanding balance of S$657.7m owed by CAREIT (Centurion is not directly liable for CAREIT’s borrowings). Consequently, on a consolidated basis, gross gearing rose to 33% (end-2025: 25%), while net gearing doubled to 24% (end-2025: 12%). While the higher debt load is a clear moderation in the credit profile, near-term financing stress remains limited. FY2027 debt maturities are only S$25.9m against S$301.7m of cash, while the next major maturities fall in FY2028 and FY2029 at S$187.4m and S$340.9m, respectively. Finance expenses rose 13% YoY to S$22.6m, with trailing twelve-month (TTM) finance expense at S$41.4m. Nevertheless, interest coverage (TTM EBITDA / TTM finance expense) remains comfortable at 5.6x, up from 5.2x (FY2025). Even after factoring in the higher debt load from the new issuance (~S$125m), we think Centurion remains in a comfortable position to service its debt, supported by manageable leverage and strong operating cash generation.

• Overall, Centurion’s credit profile has moderated from end-2025, but we think the group remains fundamentally sound. Looking ahead, management is guiding toward 2H2026 revenue of approximately S$190m (+22% YoY, +3% HoH), supported by new beds and assets coming online, alongside strong occupancy in Singapore, the UK and Australia. The favourable supply/demand dynamics in the worker and student accommodations markets, across its core Singapore and UK markets, should continue to support occupancy and rental levels. On balance, we think Centurion’s credit profile should remain well-supported given the abovementioned reasons, even after accounting for this latest debt issuance.

• New issue pricing looks attractive. Our analysis on Centurion’s new issue takes account of the 4.20% IPG, although we expect the final price guidance (FPG)  to come in below this level. Against Centurion’s existing CENSP 5.250% 31Jan2029 Corp (SGD), this new bond is fairly priced. However, we note that Centurion’s outstanding 2029 issue has limited liquidity, which could constrain transactions.

• In Table 1 below, we compare the new issue against property-related peers with similar tenors. The new bond offers an attractive yield pickup of near 50bps compared to its closest comparison of WHURSP 4.800% 04Nov2030 Corp (SGD). Against comparable Singapore sovereign bonds of similar tenors, Centurion’s new bond also provides a sizeable yield spread of roughly 200+bps.

• In sum, we view Centurion’s new issue as attractive for investors seeking stable income from an issuer backed by a diversified portfolio of accommodation assets and supported by favourable industry fundamentals.

Table 1: Bond Comparison

Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds CENSP New Issue* and WHURSP 4.800% 04Nov2030 Corp (SGD) and the analyst who produced this report hold NIL positions in the abovementioned securities. This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report – including all investment theses, ratings, price targets and conclusions – has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.