Centurion Corp secures master lease for 5,000-bed dorm in Selangor

MAINBOARD-LISTED dormitory developer and operator Centurion Corp has secured a master lease to manage a new purpose-built dormitory in Selangor, adding more than 5,000 beds to its Malaysian portfolio, it announced on Wednesday night.

The lease was secured through Knight Frank Malaysia from the Selangor State Development Corporation. This addition brings the group's purpose-built workers accommodation portfolio up to eight properties with a total of some 35,700 beds, under its Westlite Accommodation brand.

The lease for the ready-built property is expected to start on Dec 1, 2020, for a tenure of 21 years, with options to extend for a further nine years.

Under the initial three-year term, the average monthly rent will be RM362,880 (S$118,546), with rent revisions applying every three years, subject to a cap of a 6 per cent increment on the preceding year's rent.

There is an initial rent-free period of 4.5 months for renovation and fitting out, and a refundable security deposit of RM3,732,480 (S$1.2 million).

Centurion said the refundable security deposit and the cost of renovation and fitting out will be funded through internal resources, and is not expected to have a material impact on the company's consolidated net tangible assets and earnings per share for the financial year ending Dec 31, 2020.

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The property consists of two 11-storey blocks of dormitory living quarters and two basement car park levels; the total gross floor area is close to 419,000 square feet.

Centurion said: "Demand for quality workers' accommodation is expected to be strong across Malaysia, as the Amendment to the Worker's Minimum Housing and Amenities Act, enacted in 2019, came into effect on Sept 1, 2020."

Employers have up till Dec 31, 2020 to comply with the requirements of the amended Act, after which errant employers may be fined.