Centurion Corporation

[TTTI]

Tuas View may operate on razor thin margins, but that's not true for Centurion.

Aside from the newer Papan dorm, the other dorms are operating at close to full occupancy, and on a group basis, their margins are still crazily high.
IMO, it is unlikely their westlite tuas will be renewed next year

Yes, I've looked at Centurion's numbers and am aware that their profit margins have always been good. But I wonder how they're managing to do so well when their peers are struggling - do they have some kind of competitive advantage, or is it that Tuas View is badly run?

I'm also curious about the $1.16 million rent that AES supposedly pays the JTC each month for the Tuas View land. That amounts to $83.5 million over the entire 6 years' lease, which looks extremely high. Centurion only paid $80.8 million for the land on which its Westlite Woodlands dorm was built, about a year after AES won the site for Tuas View. And that was for a lease term of 30 years!

It is hard to get a true competitive moat in this business, as the main consideration for businesses will always be the price.
Having said that, Centurion is the best of it's class in the dorm management business.
Their competitive edge lies in the small little details:
for eg. Westlite papan tie down with extrenal vendor for on-site training and upgrading courses for the dorm tenants,
their dorms with workers working in Jurong island also get to check in on-site within the dorm instead of having to queue up to enter jurong island etc
Stuff like that
The other details are the intangibles such as their relationship with clients. This is a big factor because most companies wouldn't mind paying just a bit more if the relationship is established, rather than risk working with a new dorm provider.
Centurion's rates are priced at the sweet spot just above the average.

I have looked at centurion for a long time and am convinced the management is best of it's class, but unfortunately the whole industry is a tough place to be in currently, and that looks set to continue for sometime to come.