Singapore’s Centurion Sells Seoul Student Housing Asset to Exit South Korea

Singapore-based Centurion Corp has sold off its sole student housing property in South Korea in a deal valued at KRW 21.25 billion ($16 million), as the rental residential specialist narrows the scope of it student accommodation strategy.

Centurion, together with joint venture partner IGIS Asset Management, on Thursday closed on the sale of their Dwell Dongdaemun student housing facility near the University of Seoul to Ganghwa County. The local government will be using the 208-bed property as its fourth scholarship hall to provide subsidised student dormitories.

“The disposal is being carried out as part of a rationalisation of the group’s asset portfolio that is being undertaken by the company,” Centurion said in a regulatory filing later that day. The company said it intends to focus its asset portfolio on countries where it believes it can expand its operations.

Specialsing in both student housing and worker dormitories, Centurion marked its exit from South Korea as the company ramps up operations in other parts of the region, including a 732-unit Sydney student housing project proposed by its controlling shareholder, Centurion Properties in February of this year.

Dropping Out of Korea

The Centurion-IGIS JV is selling the property at a 0.6 percent discount from the asset’s book value of KRW 21.38 billion as of end-2022. Centurion and its controlling shareholder held respective 55 percent and 40 shareholdings in the joint venture, while the remaining 5 percent stake was held by IGIS.

Formerly a boutique hotel, Dwell Dongdaemun closed its doors just over four years after it began operation in February 2019, having offered amenities for its student residents such as a roof terrace, a communal hall, a meeting room and a gym.

The partners had spent KRW 13.5 billion to acquire the property in November 2018 and then made improvements estimated to have cost KRW 3.7 billion, to bring total upfront costs to around KRW 17.2 billion.

Located at 188-5 Hoegi-ro, Dongdaemun in northeastern Seoul, the property is close to some of the nation’s top schools of higher learning including Kyunghee University, the Korea Advanced Institute of Science and Technology and Hankuk University of Foreign Studies.

Occupancy in the building rose to 86 percent last year from just 66 percent in 2021 due to strong demand from returning international students, based on the company’s 2022 annual report. At the time Centurion sounded optimistic about the potential for more demand from foreign scholars.

“The government’s Study in Korea initiative seeks to invite 200,000 international students to study in Korean universities by 2023 and Centurion anticipates continued strong demand for PBSA (purpose-built student accommodation) moving forward,” the report read.

Ramping Up in Aussie, Singapore

Exiting Korea will leave Centurion, which is led by chairmen David Loh and Han Seng Juan,  with presences in four markets outside its home in Singapore, namely Malaysia, Australia, the UK and the US.

Down Under, Centurion Properties is still waiting for government approval to proceed with its plan to build a student accommodation complex at 17-21 Lachlan Avenue and 163 Herring Road in Macquarie Park, Sydney, near Macquarie University. That project is expected to requirement investment of A$132.17 million ($91.5 million at the time the project was announced).

In the US, where the firm owns and operates 2,145 beds through its Centurion US Student Housing Fund, the company decided last November to halt a planned portfolio sale due to the “uncertain market condition and interest rate environment,” just seven months after launching the sale process in April 2022.

Listed on both the Hong Kong and Singapore stock exchanges, Centurion specialises in developing and operating dedicated housing for workers under its Westlite Accommodation brand, as well as purpose-built student accommodation operated by its Dwell Student Living brand.

Back home, Centurion is busy with a S$85 million joint venture with SGX-listed developer Lian Beng Group where the pair are building a 1,650-bed dormitory for foreign workers at Ubi Avenue 3, in Singapore’s Geylang area.

“The short supply of quality worker and student accommodation is expected to continue in the immediate and mid-term, across the cities where Centurion operates,” the company said in its annual report. “The group expects demand and financial occupancy to remain robust, with continued healthy growth in rental rates.”