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SABANA REIT

Jufo23
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13-Apr-2022 10:44

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You must be new to sabana reit. This manager previously wanted to sell the reit at a rock bottom price to esr reit, said it cannot survive, go read waht the ceo and directors said in 2020
When that failed, they made shareholders bear all the fees and gave themselves huge pay raises
Then they started coming up with all kinds of ridiculous things like bringing another esr related director again and drp when leverage is super low..
Manager also a very bad record in asset enhancement. There was severe cost overrun in extension the retail side at 152 lorong chuan!! Potentially costing shareholders almost 2x the usual cost!!!
when leverage is low drp and share price below nav, drp reduce DPU and only benefits the manager

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GoldenPig
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13-Apr-2022 01:08

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As a genuine long term unitholder, I welcome any opportunity to participate in a DRP. A DRP allows me to reinvest my dividends in a REIT/company at a slightly lower cost. At the very least, it eliminates my transaction cost. On the other hand, it allows the REIT/company to increase funds for further growth without paying high fund-raising fees. So even unitholders who opt for dividends in cash also benefit.

If genuine long term unitholders want the cash for other reasons, of course they can opt for dividends in cash or part cash/part units. But why would they vote against a DRP, much less lobby others to veto it? Q claims to be long term unitholders and yet wants to kill a win-win proposal. Very fishy. What is their hidden agenda?

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Jufo23
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12-Apr-2022 20:00

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its quite evident that it the managers and directors are trying to distract shareholders attention to push through their nonsense... the last time right before the merger, they also said sabana' portfolio was bad, they cannot survive,must merge with esr reit at a big discount just see the share price now, even higher than esr reit!!!

Quarz also clarified already

Key points about Quarz Capital' s Sabana REIT investment:

We have never been contacted by any " supposed" buyers for our stake in Sabana REIT
OUR STAKE IS NOT FOR SALE
Any potential buyer would have to make an offer for all unitholders at or above NAV
We are longterm unitholders of Sabana (since 2019)
Our interests are fully aligned with all INDEPENDENT UNITHOLDERS
LETS FOCUS ON KEY ISSUES AND VOTE AGAINST RESOLUTIONS 3,4,5 TO PROTECT OUR INVESTMENT

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LongXia
Veteran

12-Apr-2022 17:15

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Yells: "BBs never say why when they buy, never tell when they sell!!"

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such a troublesome company....
a lot of retailers look up to Q, thinking it' s a Robin Hood type of company, fighting for their interests.. now you can see it' s a snake... haha..
you think Q is so generous, got a lot of free time to fight for your interests? Please la....
it' s only doing things to fit it' s own agenda. You are it' s pawns la....

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Powdyman
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12-Apr-2022 09:01

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VOTE AGAINST RESOLUTIONS 3, 4 AND 5 AT SABANA?S 26 APRIL 2022 AGM AND INCREASE THE VALUE OF SABANA?S UNIT PRICE! CLARIFICATION: QUARZ WILL ONLY CONSIDER OFFERS AT OR ABOVE NAV AND FOR ALL UNITHOLDERS TOGETHER! OUR INTERESTS ARE FULLY ALIGNED WITH INDEPENDENT UNITHOLDERS

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moonsun
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11-Apr-2022 15:25

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I still did not receive any form from Sabana. Looks like got to download and send. All received ? Tx

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Powdyman
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11-Apr-2022 12:50

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The writer is very pro ESR REiT. Talk down on Quarz as if they are going to abandon the minority shareholders.

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Joelton
Supreme

11-Apr-2022 12:00

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Amidst Quarz&rsquo s demands, a buyer emerges for its stake in Sabana REIT

Should Quarz Capital, a hedge fund focused on short-term gains, need to divest its 12% stake in Sabana Industrial REIT, it would surely have interested buyers. This is especially so should Quarz offer the buyer a discount, says an interested buyer.

More recently, Quarz Capital has been issuing videos and open letters trying to get unitholders to vote against three resolutions, the general mandate, a distribution reinvestment programme (DRP), and Charlie Chan Wai Kheong as an independent director. All three resolutions are ordinary resolutions which means they need 50% plus 1 to pass. The AGM is on Apr 26, at 10 am.

On April 14, Sabana REIT and the Securities Investors Association Singapore (SIAS) will be holding a virtual dialogue session with Sabana REIT&rsquo s unitholders at 4pm.

Pro-unitholders&rsquo interests for the longest time

Chan is a well known REIT investor, and is particularly held in high regard by Sabana REIT&rsquo s minority unitholders. Chan had acquired a modest stake in Sabana REIT when it announced a dilutive rights issue in 2016. However, he felt that the three acquisitions that were proposed using the proceeds from the rights issues were not in the interests of unitholders as they had master leases that artificially boosted valuation while the underlying rents and occupancies of the properties were lower.

See also: FHT replies to media queries concerning strategic option involving the trust

During a contentious EGM requisitioned by a bunch of unitholders in 2017, Chan questioned the valuers on the manner in which they had valued the proposed acqusitions by Sabana REIT&rsquo s then manager and sponsor. At the time, Sabana REIT&rsquo s sponsor was Vibrant Group. Subsquently, the acquisitions were not completed. Following a strategic review, Vibrant Group divested its stake in the manager to ESR Cayman. The latter also holds a 24% stake in Sabana REIT.

&ldquo I&rsquo ve been pro-unitholders interests for the longest time. I invested in more than 70% of all Singapore listed REITs,&rdquo Chan says in an interview.

Chan was appointed director of Sabana REIT&rsquo s manager on June 2, 2021. On June 28, Quarz requisitioned an EGM to put Chan&rsquo s appointment as an independent director to independent unitholders&rsquo vote in order to remove him, and to appoint Jan Moermann, the CIO of Quarz Capital as director. Moermann, as CIO of Quarz, would not be independent.

In June last year, the CEO of Sabana REIT&rsquo s manager, Donald Han had explained in an announcement that Chan&rsquo s appointment was recommended by Quarz.

So, what happened?

&ldquo As a unitholder of Sabana REIT, I voted against the merger with ESR-REIT as I felt the terms were not sufficiently in favour of Sabana REIT,&rdquo Chan says.

&ldquo Havard reached out to me in early 2021 and discussed with me about serving on the Board,&rdquo Chan continues, referring to Havard Chi, head of research and director at Quarz Capital.

Market watchers say, obviously, Chan&rsquo s vote against Sabana REIT&rsquo s merger with ESR-REIT probably made Chi think he and Chan were kindred spirits. Market watchers, including some of Sabana REIT&rsquo s minority unitholders, also reckon that Chi&rsquo s current objection to Chan as a director is likely due to Chan acting very much independently of Quarz Capital, and in the interests of unitholders. Notably, the interests of minority unitholders are not necessarily aligned with those Quarz Capital.

" The Board and CEO did not know Charlie personally when Quarz recommended his name to us. The Board carefully considered, and then accepted, Quarz' s recommendation as a good faith collaborative gesture. We have since found Charlie to be independently-minded yet professional and reasonable to work with," says Tan Cheong Hin, chairman of Sabana REIT&rsquo s manager.

Chi and Quarz Capital claim that their objection to Chan being on the board is because Chan divested a stake in what was then Cambrdige Industrial Trust to ESR Cayman at a significant premium to the REIT&rsquo s then market price. This took place in 2016 and 2017. In addition, Chi objects to Chan being a unitholder of AIMS APAC REIT. Interestingly, Quarz also has a miniscule stake in AIMS APAC REIT.

&ldquo Since being a board member here I haven&rsquo t bought anything in AIMS APAC REIT. I subscribed to the DRP and my holdings in AIMS are for public record and any increase is due to DRP,&rdquo Chan says. He also opted for DRP at Sabana REIT.

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It has come to light that Chi had recommended a couple of other names as directors to Sabana REIT&rsquo s manager and its board for consideration. Whether it is fair for Quarz to have two representatives including Chan compared to none by ESR which owns approximately 21% of Sabana REIT, is open to debate.

Since both the general mandate and the DRP were voted through in 2021, they are likely to be voted through again this year. As for the resolution on Chan&rsquo s directorship, chairman Tan and CEO Han are hoping that is voted through as well.

&ldquo We want to reach out to our many unitholders to encourage them to come out and vote. This AGM is very important for them to give us a clear indication that unitholders are supportive of our Refreshed Strategy and want us to take it forward to growth trajectory in 2022 and beyond,&rdquo CEO Han says. The manager will be giving unitholders a $20 voucher for completed proxy forms, to be spent at NTP+. The deadline for completed proxy forms to be returned is Apr 24, 10am.

&ldquo We are moving into an expansionary phase in a challenging uncertain macro-economic environment and Charlie possesses the necessary experience as a seasoned investor and unitholder, and can help to advise the management," says Han.

" To grow, we need financial flexibility and will evaluate various funding options. Hence the general mandate and DRP scheme can provide the necessary levers and flexibility to strengthen the Reit. Since at AGM 2018 when we won back the general mandate, we had been disciplined and had not activated any share issuance other than for DRP purposes amongst others,&rdquo he adds.

Han points out that in FY2021, Sabana REIT&rsquo s revenue, net property income, distributable income and DPU grew by double digits. Revenue rose 14.2% y-o-y to $81.9 million NPI rose 16.4% to $52 million and DPU was up 10.5% y-o-y to 3.05 cents. Sabana REIT&rsquo s unit price is up 5.7% since the start of the year.

This year, AEIs being planned include on 1 Tuas Ave 4 which has plot ratio of 2.5x compared to its built up plot ratio of 1.6x plans are afoot to rejuvenate older buildings and the manager will start to look at accretive acquisitions.

Instead of Quarz Capital&rsquo s increasingly strident demands through open letters, would unitholders be better served if Quarz divests its stake to interested buyers and leave Han and Sabana REIT&rsquo s manager and board to execute on the REIT&rsquo s next expansionary, DPU-enhancing stage?

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johnwongzz
Senior

10-Apr-2022 15:48

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Manager seems to be treating unitholders as idiots.. pushing through whatever they want

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johnwongzz
Senior

10-Apr-2022 15:46

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The more you read, the more angry you are at the manager

Just last year, ESR Cayman-owned Sabana manager gave the board of directors and the CEO a substantial pay and fee raise when Chan was appointed as an independent director. In particular, Tan' s director fee was increased by some 60 per cent.

Tan eager to please ESR Cayman-owned Sabana manager who has made him one of the most highly paid directors among smaller S-REITs?

Submitting my vote by email now. Voting a BIG NO to this director

Joelton ( Date: 08-Apr-2022 09:54) Posted:

Quarz Capital' s interest fully aligned with independent unitholders of Sabana Reit

WE refer to the letter by Sabana Industrial Reit chairman and independent non-executive director Tan Cheong Hin, " More than one side to story about concerns of director independent" (BT, Apr 5, 2022).

Our response is structured in two parts. In Part 1, we outline how Tan failed to tell the full story. In Part 2, we have doubts about whether Tan is the right person to defend the " independence" of Chan Wai Kheong given the string of decisions made by the board of directors, which have turned out to be detrimental to the interests of unitholders of Sabana Reit.

Part 1 - Tan' s omission of key facts can be construed as potentially misleading.

As Tan highlighted, Chan sold his unitholdings in the then Cambridge Industrial REIT (now ESR-REIT) and received about S$20 million premium over market price from ESR Cayman.

However, at no point in his letter does Tan mention the fact that Chan is also a significant unitholder of and has a substantially larger economic interest at AIMS APAC REIT, a key competitor of Sabana REIT. As a director, Chan is privy to key confidential information of Sabana REIT this can be highly beneficial to AIMS APAC REIT and his economic interest, while potentially damaging to Sabana REIT.

Tan also seemed to have left out the fact that ESR Cayman is also a significant unitholder with a 13 per cent stake in AIMS APAC REIT and has a history of consolidating smaller S-REITs. This can potentially result in a " quid pro quo" situation which can be highly detrimental to Sabana unitholders.

Put together, the full story throws Chan' s independence into doubt. We would like to repeat how Sias chairman David Gerald phrased it aptly: " Notwithstanding Sabana' s justifications, the key issue here is that although Chan fits the definition of an ID on paper and in terms of form, a good case can be made against his independence if substance is the defining criteria. Receiving a substantial payment from the controlling shareholder of Sabana' s manager, as well as holding a significant stake in a competitor clearly calls into question his independence - even if the rules have been followed."

As an independent director of Sabana REIT, Tan' s omission of key facts on the independence of Chan is deeply troubling and raises serious doubts about Tan' s own independence.

Part 2 - Tan' s " track record" as a director of Sabana REIT is still fresh in the minds of unitholders as he:

approved the appointment of Ng Shin Ein as an independent director of Sabana REIT despite her prior significant business transactions with ESR Cayman

recommended and actively promoted the proposed value-destructive merger with ESR-REIT which is now clearly evident to have mainly benefited ESR Cayman and ESR-REIT, at the expense of Sabana unitholders

made unitholders bear the full cost of the failed merger despite it being proposed by the manager

consistently tabled resolutions such as new unit issues and dividend reinvestment plans, which were overwhelmingly rejected by independent unitholders (resolutions were passed mainly due to ESR Cayman' s votes)

Tan is now vehemently defending the " independence" of Chan despite the clear corporate governance and potential conflict of interest issues.

Just last year, ESR Cayman-owned Sabana manager gave the board of directors and the CEO a substantial pay and fee raise when Chan was appointed as an independent director. In particular, Tan' s director fee was increased by some 60 per cent.

Is Tan eager to please ESR Cayman-owned Sabana manager who has made him one of the most highly paid directors among smaller S-REITs?

Tan' s actions seem to reflect a failure to prioritise unitholders' interests over those of the REIT manager and its shareholders in accordance with the Securities and Futures Act.

Sabana REIT manager' s seemingly concerted effort to retain Chan as a director regardless of the corporate governance and potential conflict of interest issues with ESR Cayman raises serious questions.

It is a painful walk down memory lane as it reminds unitholders of the appointment of Ng in November 2019 as an independent director despite her prior business dealings with ESR Cayman. The proposed lowball and value-destructive merger with ESR-REIT followed shortly after.

As clearly pointed out by Adrian Chui, the CEO of ESR-REIT in the merger with ARA Logos Trust, the sharing of a common sponsor with existing overlapping investment mandate can create uncertainties arising from the conflict of interest which are likely to negatively impact the growth potential of both REITs.

Sabana unitholders already face the overlapping investment mandate and potential conflict of interest issues due to ESR Cayman' s majority shareholding in the managers of both Sabana REIT and ESR-REIT.

It is thus critical that unitholders vote against the endorsement of Chan' s appointment as an independent director of the manager as it can potentially create more corporate governance and conflict of interest issues.

Quarz' s interest is fully aligned with all independent unitholders of Sabana REIT. We urge all unitholders to vote against Resolutions 3, 4 and 5 at Sabana' s Apr 26 AGM to protect all our investments.

Only when unitholders send a strong statement to the manager will they finally " wake up" and focus solely on improving Sabana unitholders' interest, DPU and unit price.

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Joelton
Supreme

08-Apr-2022 09:54