Centurion in pole position as demand for workers' dorms surges

Firm worth consideration as such facilities may be top investment in next 10 to 15 years

Singapore's population of 5.9 million consists of 61 per cent Singaporeans, 9 per cent permanent residents, and 30 per cent foreigners who are working or studying in the country.

According to data from the National Population and Talent Division, the largest increase came from workers in the construction, marine shipyard and process (CMP) sectors, as contractors hired more workers for projects that were delayed by the pandemic.

Work permits in the CMP segment numbered some 441,000 in December 2023, a huge jump from the 318,000 in December 2021. These are for the people staying in workers' dormitories.

In just 24 months, the Republic added 123,000 workers to this segment alone, leading to a huge shortage of bed spaces. In March 2023, there were just 256,000 beds in purpose-built dormitories (PBDs).

The dormitories are full. Despite the fanfare about new rules that include limiting dormitory rooms to only 12 residents, only dormitories that are being built have to abide by them now, with existing facilities getting a transition period to implement them. The vast majority of these are housing 12 to 16 workers per room, the pre-pandemic average.

Coupled with increasing operating costs, the surge in demand pushed up the median monthly rent for commercial dorm beds from about $280 per worker in early 2021 to around $420 in the first quarter of 2023. In 2024, rental rates have risen to around $600 per month.

Who stands to gain from this scenario? Enter Centurion Corp. The firm provides purpose-built workers' accommodation in Singapore and Malaysia, and has exposure to student accommodation in Australia, Britain and the US.

It is the largest dormitory operator in Singapore, with five operating PBDs accounting for 27,530 beds and four operating quick-built dormitories (QBDs) offering 7,256 beds, making a total of 34,786 beds.