| When it comes to finding a reliable income stream in today's real estate market, Centurion Accommodation REIT (CAREIT) is proving to be a good choice. Starting with the most compelling metric for income investors, CAREIT's yield is far superior to its comparables as this chart shows:  Note: CAREIT yield is based on S$1.11 per unit as at 31 Dec 2025, and after annualising the results for the 98-day period from 25 Sept 2025 to 31 Dec 2025.Offering an attractive dividend yield of 5.84%, CAREIT eclipses the FTSE ST All-Share Real Estate Investment Trusts Index (FSTREI) and the broader Straits Times Index. It also offers a massive premium over the safe-haven Singapore 10-year Government Bond yield. |
|
Metrics |
FY2025 Actual |
IPO Forecast |
Change |
|
Gross revenue (SGD mn) |
50.7 |
49.0 |
+3.4% |
|
Net property income (SGD mn) |
36.1 |
34.6 |
+4.1% |
|
Amount distributable (SGD mn) |
30.0 |
28.1 |
+6.7% |
|
DPU (SG cents) |
1.739 |
1.630 |
+6.7% |
|
PBWA occupancy |
97.6% |
95.8% |
+1.8 ppt |
|
PBSA |
99.1% |
97.3% |
+1.8 ppt |
|
Aggregate leverage |
30.7% |
31.0% |
-0.3 ppt |
|
Weighted average financing cost |
3.46% |
4.16% |
-0.70 ppt |
|
Interest coverage ratio |
6.60x |
4.70x |
+1.90x |
Most importantly for unitholders, the Distribution per Unit (DPU) was a rewarding 1.739 Singapore cents, which is 6.7% higher than the initial IPO forecast.
The Purpose-Built Worker Accommodation (PBWA) portfolio achieved a stellar 97.6% occupancy rate, while the Purpose-Built Student Accommodation (PBSA) portfolio reached near-full capacity at 99.1%.
Both figures represent a 1.8 percentage point increase over their respective IPO forecasts.
Analysts from both CGS International and DBS have issued positive commentary on CAREIT's results.
Consequently, CGS analysts Li Jialin and Lock Mun Yee reiterated their "Add" rating and raised their Dividend Discount Model-based target price to S$1.39.
| "CAREIT continue to feature as our top pick within the mid-cap space, with industry leading DPU growth, backed by a SG-centric portfolio. We believe that share price is awaiting to catch the next wave of growth with EQDP fund in flow and potential EPRA NAREIT indexation post its first annual report." -- Geraldine Wong, DBS analyst |
In a note, DBS analyst Geraldine Wong said, "CAREIT’s first set of results since listing serve as an early beat, capturing sector tailwinds faster than expected".
Looking ahead, she confidently projected that "the magnitude of the beat paves way for a sector-high DPU growth in FY26, with low interest rates partially locked in and occupancy scaling up faster than expected".
DBS maintained a "BUY" call with a target price of SGD 1.30.
A gym for workers at the shiny new 1,650-bed Westlite Ubi. Other facilities include multi-purpose halls, minimarts and a barber shop. Photo: Company
Looking forward, the REIT is already unlocking further value through a combination of asset enhancement initiatives and inorganic growth.
The recent acquisition of the 732-bed Epiisod Macquarie Park in Sydney provides immediate accretion, with fixed rental income locked in through a master lease until the end of 2027.
The 732-bed EPIISOD Macquarie Park for student accommodation. Photo: CAREIT
Domestically, ongoing capacity expansions are progressing rapidly.
Westlite Mandai and Westlite Toh Guan have already received approvals for expanded capacity, which will soon begin contributing to the bottom line.
Furthermore, CAREIT received provisional permission in February 2026 to develop an additional 540-bed block at Westlite Ubi, setting the stage for sustained Net Property Income growth into FY28 and beyond.
CAREIT offers investors exposure to the accommodation sector, driven by demand from two massive industries: construction/labour and higher education. CAREIT has established itself as a premier yield play in the Singapore market.
With its market-beating 5.84% yield, an inaugural earnings report that exceeded IPO forecasts, and endorsements from analysts, CAREIT presents a good case for investors seeking both defensive income and visible growth. |
→ DBS's report is here and CGS' here.
→ See also: From Sunset Industry to Sunrise REIT: Centurion's Winning Pivot over 14 Years
