ACCOMMODATION assets operator Centurion Corporation : OU8 0% on Tuesday (Apr 9) said its wholly owned subsidiary Centurion Overseas Investments has established a 60 per cent-owned unit – Centurion-Lionrock (HK) – for the key purpose of leasing a building in Hong Kong.
This marks Centurion’s foray into the Hong Kong market, and it has the intention of refurbishing the property and turning it into an accommodation with a total capacity of 66 beds to house primarily students, the company said in a filing to the Singapore bourse.
The remaining 40 per cent of Centurion-Lionrock (HK) is owned by an independent third party and joint venture partner, LionRock Property.
The property in question is situated at 177 Prince Edward Road West in Kowloon, Hong Kong, and has a capacity of 66 beds.
It will be refurbished to house students under Centurion’s dwell student accommodation brand and management platform pursuant to a license agreement between Centurion Overseas Investments and Centurion-Lionrock (HK).
The proposed refurbishment is expected to be completed and operational in September, and the projected cost of the refurbishment and initial working capital is about HK$11.5 million (S$2 million). This will be funded by a shareholder loan at an annual interest of 8 per cent from Centurion Overseas Investments.
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The master lease of the property commenced on Apr 5, for a term of five years. There are options to renew the least for three years and a further two years under the master lease agreement, Centurion said.
The company added that LionRock specialises in sourcing assets and repositioning them to optimise use and returns, and has had the experience in managing student accommodation in Hong Kong since 2013.
Centurion said the transaction is not expected to have a material impact on its consolidated net tangible assets or earnings per share for the fiscal year ending Dec 31.
Shares of Centurion rose 1.2 per cent or S$0.005 on Tuesday to close at S$0.43 on a cum-dividend basis.
