Centurion wins open tender for 12,000-bed dorm plot in Malaysia

It has an estimated 17,000-bed capacity in Penang alone by 2018.

Centurion announced that it has won an open tender for a 12,000-bed dormitory land plot, comprising a 99-year-lease land area of 12.6ha, located in Juru, Penang, Malaysia from Penang Development Corporation, a government statutory board in Penang for SGD8.06m.

According to a report by OSK-DMG, it will be a compound with extensive recreation facilities and amenities designed for community living with completion of Phase 1 scheduled by 2H16 and Phase 2 within two years after Phase 1. The construction cost is estimated at MYR72m for both Phase 1 and 2 and we expect bed rental to be north of MYR120 per bed per month. However, we also expect earnings to come in only from FY17 onwards.

Despite a potential surge of 100k beds coming onto the market over the next few years, OSK-DMG analysts remain positive on Centurion as they believe it stands out among its listed peers in terms of cost structure, margins and experience in the dormitory business.