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Centurion Corp Making Inroads into Indonesia

centurion corp

Three weekends ago saw Singapore break her own record, albeit notoriously. The first riot over many decades broke out in the Little India area. Around 400 foreign workers were involved in the fracas.

Busloads of foreign workers, transported from their respective dormitories, congregate in the area every weekend to wind down from a week of hectic labour. After an evening of relaxation, they head back to their dormitories.

One of the many suppliers of such dormitories in our island is Centurion Corporation Limited (SGX: OU8). The company owns and operates accommodation assets, as well as a storage disc manufacturing business. The firm currently has a portfolio consisting of 18,186 and 13,520 beds in Singapore and Malaysia respectively.

On 13 Dec 2013, the company made an announcement through Singapore Exchange that it had bought a 7,220 square metre plot of land in Jakarta, Indonesia to develop accommodation for workers. This will mark Centurion’s first foray into the worker accommodation arena in Indonesia.

The land cost was around S$800,000 and was paid for by internal resources. Centurion’s wholly owned subsidiary, PT Westlite Accommodation Cibitung, will develop, own and operate the accommodation.

The accommodation will be located in the eastern part of Jakarta in Bekasi District, about 30 km from Central Jakarta. Once completed in 2016, the dormitories will have 750 apartment units and will provide accommodation for those working in nearby industrial parks such as Cibitung Industrial Park, one of the many established industrial parks in the area, which is just a seven-minute drive away.

Multi-national companies such as LG Electronics, Panasonic and Sumitomo operate in the Cibitung Industrial Park. Those companies are among the 200 that operate in the industrial park. The number of people working in and around the Cibitung Industrial Park is estimated to be in the region of 100,000.

Mr Kong Chee Min, Chief Executive Officer of Centurion Corporation Limited, said, “Indonesia is an established manufacturing hub in Asia and despite recent market volatility, foreign direct investment into the manufacturing sector remains robust. We expect to see very strong demand for our accommodation assets in this area once they are fully developed. This particular project will also kick start our accommodation business in Indonesia and opens the door for us to explore the development of our accommodation business in other parts of the country as well.”

At the end of last month, the firm also made an announcement that it is entering the student accommodation business in Melbourne, Australia for the first time. It was selected after tabling a bid of A$60 million for the RMIT Village and an adjoining car park building. The buildings are close to two universities, the RMIT University and University of Melbourne.

Cneturion’s shares last exchanged hands at $0.55 on Thursday and carry a historical PE ratio of 6.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.