Dorms are good business

Listening to Mr Tony Bin Hee Din extol the virtues of his work, one might be forgiven for thinking he is in the hospitality industry. But truth be told, Mr Bin, executive director of Centurion, is in the business of building and operating dormitories for foreign workers.

The purpose-built dormitory that Centurion owns and manages is modern, spacious and comes with amenities to make life more pleasant for an overseas worker.

“We house no more than 12 men in quarters of 40 sq m – the size of a three-room HDB flat – and each unit has its own bathroom and laundry facilities and a kitchen for the men to cook their own meals,” said Mr Din, 52, who has been in the real estate and financial industry for the last 20 years, the last three in the dorm business.

The dormitory in Toh Guan, which houses more than 5,000 workers, has a fitness area, a badminton court, a reading room, Internet facilities, TV and ATM machines.

There is even a sundry store where the men can buy their daily needs, including spices and beer. But they are not allowed to bring the beer back into their rooms.

They drink it at the store’s precincts. And for those who do not want to cook, there is a food court.

“We try to make our dorms a home away from home, as far as we can, for these work permit holders, the majority coming from India, Bangladesh and Sri Lanka,” said Mr Bin.

He makes periodic inspection visits to the dorm, sometimes at night, to talk to the workers and make sure that all is well. Cricket on TV, he notes, is a big draw and nearly everybody will be on hand to watch such programmes.

“We see ourselves as more than just an accommodation provider. We organise outings, a regular pasar malam and other activities that we put together to help integrate the different ethnic groups,” said Mr Bin.

Bigger recreational plans are in the pipeline, he said, without wanting to go into details just yet.

Even bigger plans for company expansion are being mooted. There is opportunity for growth in Malaysia, especially in key industrial hubs where foreign workers are employed, and Centurion is in discussion with potential business partners.

“Over the next few years, we aim to be one of the leading providers of quality worker accommodation in the region. Particularly, we have plans to expand into Malaysia and China.

“In Malaysia, we hope to build and manage a portfolio capacity of 50,000 to 100,000 beds over time,” said group chief executive officer Kong Chee Min, 46.

Looking further afield, Mr Kong said China would also be a very promising market as there would be a definite need for dorms to house workers migrating from other parts of China towards the new industrialised growth centres.

In Singapore, there is the need to locate dorms close to the work place, to cut down on transport costs, but not too close to developed housing because of the social issues involved.

Despite the constraints, there is still enough land in Singapore for more dormitories to be built.

Already, Centurion is making plans to put up another dorm on a piece of land in Mandai. With more foreign workers expected to be needed to meet the needs of the manufacturing sector in Singapore, the company sees scope for building beyond Mandai.

Yet, the company began in a very different business altogether, in optical disc manufacturing, as the Singapore Exchange-listed SM Summit Holdings. But it decided that there was more growth potential in the dormitory business and acquired Centurion Dormitory (Westlite).

It is now the first dormitory business listed on the exchange as Centurion Corporation.

“Building and managing dormitories is a holistic business. It needs a lot of skill sets as you have diverse nationalities in one dormitory. There is a crucial need to provide recreational facilities.

“We have key management who have the expertise to expand and manage this business,” said Mr Kong, referring to Mr Kelvin Teo, a veteran in the industry and the COO of the dormitory business.

The business return is acceptable, he said Mr Kong: “Based on the historical net profit after tax of S$5.7 million for FY2010, the acquisition of Westlite Dormitory represents a net profit yield of approximately 6.7 per cent.” More competition could be expected in Singapore. But the real growth for the dorm business would be overseas, he added.

Source : Today – 25 Aug 2011