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SABANA REIT

Starship
Supreme
25-Mar-2021 10:06     
 
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 Alert Admin 		What an ugly company!!!  no

Joelton      ( Date: 25-Mar-2021 09:23) Posted:

Sabana Reit independent directors quit after minority unitholders plan to withhold endorsement
TWO appointed independent non-executive directors of Sabana Shari' ah Compliant Industrial Reit (Sabana Reit) have resigned following " certain unitholders" refusal to endorse their appointments, the Reit' s manager announced in regulatory filings on Wednesday night.
 
The announcements did not name the unitholders, but noted that they hold about 12 per cent of the total units in the Reit. Earlier this month, minority unitholders Quarz Capital Management and Black Crane Capital had said in an open letter that they would not endorse the proposed directors.
 
Yeo Wee Kiong and Willy Shee had been appointed on Jan 1 so that the board of directors of the manager could comprise four independent non-executive directors, with their continuing appointment subject to endorsement at the Reit' s annual general meeting (AGM) in April.
 
After the statement by " certain unitholders" , the appointed directors " have decided to withdraw their consent to stand for such endorsement" and have tendered their resignations. These took immediate effect on Wednesday, said the manager. It added: " The manager board respects their decisions."
 
With their resignations, the board now consists only of chairman Tan Cheong Hin and audit and risk committee chairman Wong Heng Tew, who will also respectively replace Mr Yeo and Mr Shee as chairman and member of the nominating and remuneration committee.
 
The committees may be reconstituted when new independent directors join the board.
 
The Reit manager said: " The manager board will be searching for suitable candidates as independent non-executive directors as replacements as soon as practicable." The manager noted that these appointment are subject to the approval of the Monetary Authority of Singapore.
 
As with the recent appointments, the search process will be carried out independent of ESR Cayman, which wholly owns the manager and holds about 20.88 per cent of the units in the Reit.
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Joelton
Supreme
25-Mar-2021 09:23     
 
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 Alert Admin
Sabana Reit independent directors quit after minority unitholders plan to withhold endorsement
TWO appointed independent non-executive directors of Sabana Shari' ah Compliant Industrial Reit (Sabana Reit) have resigned following " certain unitholders" refusal to endorse their appointments, the Reit' s manager announced in regulatory filings on Wednesday night.
 
The announcements did not name the unitholders, but noted that they hold about 12 per cent of the total units in the Reit. Earlier this month, minority unitholders Quarz Capital Management and Black Crane Capital had said in an open letter that they would not endorse the proposed directors.
 
Yeo Wee Kiong and Willy Shee had been appointed on Jan 1 so that the board of directors of the manager could comprise four independent non-executive directors, with their continuing appointment subject to endorsement at the Reit' s annual general meeting (AGM) in April.
 
After the statement by " certain unitholders" , the appointed directors " have decided to withdraw their consent to stand for such endorsement" and have tendered their resignations. These took immediate effect on Wednesday, said the manager. It added: " The manager board respects their decisions."
 
With their resignations, the board now consists only of chairman Tan Cheong Hin and audit and risk committee chairman Wong Heng Tew, who will also respectively replace Mr Yeo and Mr Shee as chairman and member of the nominating and remuneration committee.
 
The committees may be reconstituted when new independent directors join the board.
 
The Reit manager said: " The manager board will be searching for suitable candidates as independent non-executive directors as replacements as soon as practicable." The manager noted that these appointment are subject to the approval of the Monetary Authority of Singapore.
 
As with the recent appointments, the search process will be carried out independent of ESR Cayman, which wholly owns the manager and holds about 20.88 per cent of the units in the Reit.
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laksaman57
Supreme
22-Mar-2021 21:16     
 
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 Alert Admin 		Since Sabana manager already announced NTP+ contribution will flow in 2H20, writer could have answer the 'what happen next' question by saying something positive like 'dpu will rise' or 'valuation will rise' or 'some fund offer to buy the reit', etc.

laksaman57      ( Date: 22-Mar-2021 20:53) Posted:

Why writer tried to portray we, the minority unitholders , are worry 🤔 .

"...For minority unitholders of Sabana Reit who rallied against the proposed merger with ESR-Reit only a few months ago, however, the big question is: What happens then?
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laksaman57
Supreme
22-Mar-2021 21:00     
 
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 Alert Admin 		Which unitholders think he/she should foot the bill for the failed merger initiated unilaterally by the manager which is owned by the sponsor who also owned ESR reit manager ?

laksaman57      ( Date: 22-Mar-2021 20:46) Posted:

Writer is confused. It's not only Quartz & Black Crane. It's ALL UNIT HOLDERS DEMANDING !

"...they are demanding that the manager of Sabana Reit foot the entire cost of the failed merger with ESR-Reit - which they estimate to be S$2.7 million. "

johnwongzz      ( Date: 22-Mar-2021 17:47) Posted:

https://www.businesstimes.com.sg/companies-markets/is-it-time-for-sabana-reit-to-be-euthanised

Is it time for Sabana Reit to be euthanised?

BEN PAUL

THE dissident minority unitholders of Sabana Shari' ah Compliant Industrial Reit (Sabana Reit) that voted down its proposed merger with ESR-Reit more than three months ago are now threatening to withhold their endorsement of two new independent directors at the coming annual general meeting.

Quarz Capital Management and Black Crane Capital said last week in an open letter to the board and management of Sabana Reit' s manager that they are not convinced the proposed directors are committed to defend the interests of minority investors.

" We believe that directors who can explore the full range of options for Sabana Reit to close the substantial valuation gap are required and not just directors who are suited to the continuation of ' business as usual' ," they added, in the letter.

In January, the manager of Sabana Reit said it had appointed former CBRE Asia chairman Willy Shee Ping Yah and lawyer-turned-investor Yeo Wee Kiong as independent directors.

What exactly do Quarz and Black Crane want the manager of Sabana Reit to do? And, should minority unitholders be cheering the continued pressure they are applying on the manager of Sabana Reit?

For the most part, Quarz and Black Crane seem to want what every other unitholder wants and what the manager of Sabana Reit ought to be trying to deliver.

In their letter, Quarz and Black Crane referred approvingly to Sabana Reit' s announcement earlier this month that the lifestyle mall at its flagship property New Tech Park had received its Temporary Occupation Permit and will open in Q2 2021.

The mall, dubbed NTP+, spans some 43,000 sq ft, and comprises 25 units on the ground floor with a food court on the second level. As at March 10, NTP+ had a total occupancy rate of more than 83 per cent.

Quarz and Black Crane figure that a full year of rental contribution from NTP+ could potentially lift Sabana Reit' s annualised distribution per unit (DPU) to about S$0.032. Based on Sabana Reit' s closing price on Friday of S$0.39, this reflects a DPU yield of about 8.2 per cent.

" This potentially makes Sabana one of the highest yielding (Singapore Exchange-listed) industrial Reits despite having one of the lowest leverage levels," Quarz and Black Crane noted in their letter.

For FY2020, Sabana Reit' s total DPU fell by 5.5 per cent to S$0.0276. Its aggregate leverage stood at 33.5 per cent as at Dec 31.

Quarz and Black Crane went on to say that Sabana Reit could further increase its DPU by lowering its interest cost to below 3 per cent (from as much as 3.2 per cent in H2 2020), increasing its overall occupancy rate to 85 per cent (from 76.5 per cent as at Dec 31), and pursuing redevelopment projects and asset enhancement initiatives.

In particular, they estimate that the development of an additional 200,000 sq ft of space at New Tech Park could lift Sabana Reit' s DPU by more than 15 per cent.

Distrust limits growth

There is no conceivable reason that Sabana Reit would not be prepared to pursue these initiatives, or any other initiative that drives up its DPU in a sustainable manner and enhances the market value of its units.

For minority unitholders of Sabana Reit who rallied against the proposed merger with ESR-Reit only a few months ago, however, the big question is: What happens then?

If Sabana Reit is to be useful to its parent ESR Cayman, it will eventually have to begin raising funds and acquiring additional properties. But this will be hard to do if its minority investors fundamentally do not trust the manager.

Judging from their letter, Quarz and Black Crane certainly appear to be taking a hardline approach with the manager of Sabana Reit.

In the first place, they are demanding that the manager of Sabana Reit foot the entire cost of the failed merger with ESR-Reit - which they estimate to be S$2.7 million.

On top of that, they are insisting that ESR Cayman should have no say in the nomination of any independent directors to the board of Sabana Reit' s manager. " Otherwise, this can be interpreted as ' control' over the business affairs and strategic directions of Sabana Reit," they added, in the letter.

Yet, for many investors, the strategic backing of a corporate group like ESR Cayman is not a bad thing, especially when it comes to sourcing for promising assets outside of Singapore.

Indeed, beyond improving the revenue generating potential of its existing assets, Sabana Reit' s perceived ability to acquire additional properties with growth potential could be an important driver of the market valuation of its units.

Euthanise Sabana Reit?

Before going any further, let me emphasise that Quarz and Black Crane should be applauded for their effort in blocking the merger of Sabana Reit and ESR-Reit, which are both controlled by ESR Cayman.

The deal would have seen investors exchanging units in Sabana Reit for units in ESR-Reit on terms that valued Sabana Reit at a steep discount to its book value, just before upside from NTP+ kicked in.

Moreover, the distrust that Quarz and Black Crane are displaying towards Sabana Reit' s manager is not unwarranted. After all, if the manager could not see how the proposed merger with ESR-Reit would have destroyed value for unitholders of Sabana Reit, it stands to reason that any deals it recommends in the future may well be similarly flawed.

Yet, without the prospect of a steady stream of acquisitions, Sabana Reit' s growth would be limited and its currently elevated DPU yields may not compress to the levels of leading industrial property Reits.

For minority investors of Sabana Reit, the best outcome now might well be if ESR Cayman came to the realisation that Sabana Reit' s likely usefulness as an asset securitisation platform has been badly impaired, and that it is time to put an end to all the misery it is causing.

ESR Cayman could perhaps explore the possibility of making an offer for Sabana Reit' s S$840 million portfolio, optimising the value of each property, and eventually looking for profitable exit opportunities. Meanwhile, Sabana Reit could be wound up and any funds returned to unitholders.

Euthanising Sabana Reit and paying off its irate unitholders would also leave ESR Cayman with just one Singapore-listed Reit, putting an end to questions about their overlapping interests.

Best of all, unitholders of Sabana Reit would have the opportunity to immediately monetise their units, potentially at a price that is closer to its book value of S$0.51 per unit. They could then use the proceeds to invest in the leading industrial property Reits in the local market, which have growth prospects that are probably far superior to Sabana Reit.
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laksaman57
Supreme
22-Mar-2021 20:53     
 
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 Alert Admin 		Why writer tried to portray we, the minority unitholders , are worry 🤔 .

"...For minority unitholders of Sabana Reit who rallied against the proposed merger with ESR-Reit only a few months ago, however, the big question is: What happens then?
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laksaman57
Supreme
22-Mar-2021 20:46     
 
laksaman57 About Contact  Quote this Post!  
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 Alert Admin 		Writer is confused. It's not only Quartz & Black Crane. It's ALL UNIT HOLDERS DEMANDING !

"...they are demanding that the manager of Sabana Reit foot the entire cost of the failed merger with ESR-Reit - which they estimate to be S$2.7 million. "

johnwongzz      ( Date: 22-Mar-2021 17:47) Posted:

https://www.businesstimes.com.sg/companies-markets/is-it-time-for-sabana-reit-to-be-euthanised

Is it time for Sabana Reit to be euthanised?

BEN PAUL

THE dissident minority unitholders of Sabana Shari' ah Compliant Industrial Reit (Sabana Reit) that voted down its proposed merger with ESR-Reit more than three months ago are now threatening to withhold their endorsement of two new independent directors at the coming annual general meeting.

Quarz Capital Management and Black Crane Capital said last week in an open letter to the board and management of Sabana Reit' s manager that they are not convinced the proposed directors are committed to defend the interests of minority investors.

" We believe that directors who can explore the full range of options for Sabana Reit to close the substantial valuation gap are required and not just directors who are suited to the continuation of ' business as usual' ," they added, in the letter.

In January, the manager of Sabana Reit said it had appointed former CBRE Asia chairman Willy Shee Ping Yah and lawyer-turned-investor Yeo Wee Kiong as independent directors.

What exactly do Quarz and Black Crane want the manager of Sabana Reit to do? And, should minority unitholders be cheering the continued pressure they are applying on the manager of Sabana Reit?

For the most part, Quarz and Black Crane seem to want what every other unitholder wants and what the manager of Sabana Reit ought to be trying to deliver.

In their letter, Quarz and Black Crane referred approvingly to Sabana Reit' s announcement earlier this month that the lifestyle mall at its flagship property New Tech Park had received its Temporary Occupation Permit and will open in Q2 2021.

The mall, dubbed NTP+, spans some 43,000 sq ft, and comprises 25 units on the ground floor with a food court on the second level. As at March 10, NTP+ had a total occupancy rate of more than 83 per cent.

Quarz and Black Crane figure that a full year of rental contribution from NTP+ could potentially lift Sabana Reit' s annualised distribution per unit (DPU) to about S$0.032. Based on Sabana Reit' s closing price on Friday of S$0.39, this reflects a DPU yield of about 8.2 per cent.

" This potentially makes Sabana one of the highest yielding (Singapore Exchange-listed) industrial Reits despite having one of the lowest leverage levels," Quarz and Black Crane noted in their letter.

For FY2020, Sabana Reit' s total DPU fell by 5.5 per cent to S$0.0276. Its aggregate leverage stood at 33.5 per cent as at Dec 31.

Quarz and Black Crane went on to say that Sabana Reit could further increase its DPU by lowering its interest cost to below 3 per cent (from as much as 3.2 per cent in H2 2020), increasing its overall occupancy rate to 85 per cent (from 76.5 per cent as at Dec 31), and pursuing redevelopment projects and asset enhancement initiatives.

In particular, they estimate that the development of an additional 200,000 sq ft of space at New Tech Park could lift Sabana Reit' s DPU by more than 15 per cent.

Distrust limits growth

There is no conceivable reason that Sabana Reit would not be prepared to pursue these initiatives, or any other initiative that drives up its DPU in a sustainable manner and enhances the market value of its units.

For minority unitholders of Sabana Reit who rallied against the proposed merger with ESR-Reit only a few months ago, however, the big question is: What happens then?

If Sabana Reit is to be useful to its parent ESR Cayman, it will eventually have to begin raising funds and acquiring additional properties. But this will be hard to do if its minority investors fundamentally do not trust the manager.

Judging from their letter, Quarz and Black Crane certainly appear to be taking a hardline approach with the manager of Sabana Reit.

In the first place, they are demanding that the manager of Sabana Reit foot the entire cost of the failed merger with ESR-Reit - which they estimate to be S$2.7 million.

On top of that, they are insisting that ESR Cayman should have no say in the nomination of any independent directors to the board of Sabana Reit' s manager. " Otherwise, this can be interpreted as ' control' over the business affairs and strategic directions of Sabana Reit," they added, in the letter.

Yet, for many investors, the strategic backing of a corporate group like ESR Cayman is not a bad thing, especially when it comes to sourcing for promising assets outside of Singapore.

Indeed, beyond improving the revenue generating potential of its existing assets, Sabana Reit' s perceived ability to acquire additional properties with growth potential could be an important driver of the market valuation of its units.

Euthanise Sabana Reit?

Before going any further, let me emphasise that Quarz and Black Crane should be applauded for their effort in blocking the merger of Sabana Reit and ESR-Reit, which are both controlled by ESR Cayman.

The deal would have seen investors exchanging units in Sabana Reit for units in ESR-Reit on terms that valued Sabana Reit at a steep discount to its book value, just before upside from NTP+ kicked in.

Moreover, the distrust that Quarz and Black Crane are displaying towards Sabana Reit' s manager is not unwarranted. After all, if the manager could not see how the proposed merger with ESR-Reit would have destroyed value for unitholders of Sabana Reit, it stands to reason that any deals it recommends in the future may well be similarly flawed.

Yet, without the prospect of a steady stream of acquisitions, Sabana Reit' s growth would be limited and its currently elevated DPU yields may not compress to the levels of leading industrial property Reits.

For minority investors of Sabana Reit, the best outcome now might well be if ESR Cayman came to the realisation that Sabana Reit' s likely usefulness as an asset securitisation platform has been badly impaired, and that it is time to put an end to all the misery it is causing.

ESR Cayman could perhaps explore the possibility of making an offer for Sabana Reit' s S$840 million portfolio, optimising the value of each property, and eventually looking for profitable exit opportunities. Meanwhile, Sabana Reit could be wound up and any funds returned to unitholders.

Euthanising Sabana Reit and paying off its irate unitholders would also leave ESR Cayman with just one Singapore-listed Reit, putting an end to questions about their overlapping interests.

Best of all, unitholders of Sabana Reit would have the opportunity to immediately monetise their units, potentially at a price that is closer to its book value of S$0.51 per unit. They could then use the proceeds to invest in the leading industrial property Reits in the local market, which have growth prospects that are probably far superior to Sabana Reit.
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johnwongzz
Senior
22-Mar-2021 17:47     
 
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 Alert Admin

https://www.businesstimes.com.sg/companies-markets/is-it-time-for-sabana-reit-to-be-euthanised

Is it time for Sabana Reit to be euthanised?

BEN PAUL

THE dissident minority unitholders of Sabana Shari' ah Compliant Industrial Reit (Sabana Reit) that voted down its proposed merger with ESR-Reit more than three months ago are now threatening to withhold their endorsement of two new independent directors at the coming annual general meeting.

Quarz Capital Management and Black Crane Capital said last week in an open letter to the board and management of Sabana Reit' s manager that they are not convinced the proposed directors are committed to defend the interests of minority investors.

" We believe that directors who can explore the full range of options for Sabana Reit to close the substantial valuation gap are required and not just directors who are suited to the continuation of ' business as usual' ," they added, in the letter.

In January, the manager of Sabana Reit said it had appointed former CBRE Asia chairman Willy Shee Ping Yah and lawyer-turned-investor Yeo Wee Kiong as independent directors.

What exactly do Quarz and Black Crane want the manager of Sabana Reit to do? And, should minority unitholders be cheering the continued pressure they are applying on the manager of Sabana Reit?

For the most part, Quarz and Black Crane seem to want what every other unitholder wants and what the manager of Sabana Reit ought to be trying to deliver.

In their letter, Quarz and Black Crane referred approvingly to Sabana Reit' s announcement earlier this month that the lifestyle mall at its flagship property New Tech Park had received its Temporary Occupation Permit and will open in Q2 2021.

The mall, dubbed NTP+, spans some 43,000 sq ft, and comprises 25 units on the ground floor with a food court on the second level. As at March 10, NTP+ had a total occupancy rate of more than 83 per cent.

Quarz and Black Crane figure that a full year of rental contribution from NTP+ could potentially lift Sabana Reit' s annualised distribution per unit (DPU) to about S$0.032. Based on Sabana Reit' s closing price on Friday of S$0.39, this reflects a DPU yield of about 8.2 per cent.

" This potentially makes Sabana one of the highest yielding (Singapore Exchange-listed) industrial Reits despite having one of the lowest leverage levels," Quarz and Black Crane noted in their letter.

For FY2020, Sabana Reit' s total DPU fell by 5.5 per cent to S$0.0276. Its aggregate leverage stood at 33.5 per cent as at Dec 31.

Quarz and Black Crane went on to say that Sabana Reit could further increase its DPU by lowering its interest cost to below 3 per cent (from as much as 3.2 per cent in H2 2020), increasing its overall occupancy rate to 85 per cent (from 76.5 per cent as at Dec 31), and pursuing redevelopment projects and asset enhancement initiatives.

In particular, they estimate that the development of an additional 200,000 sq ft of space at New Tech Park could lift Sabana Reit' s DPU by more than 15 per cent.

Distrust limits growth

There is no conceivable reason that Sabana Reit would not be prepared to pursue these initiatives, or any other initiative that drives up its DPU in a sustainable manner and enhances the market value of its units.

For minority unitholders of Sabana Reit who rallied against the proposed merger with ESR-Reit only a few months ago, however, the big question is: What happens then?

If Sabana Reit is to be useful to its parent ESR Cayman, it will eventually have to begin raising funds and acquiring additional properties. But this will be hard to do if its minority investors fundamentally do not trust the manager.

Judging from their letter, Quarz and Black Crane certainly appear to be taking a hardline approach with the manager of Sabana Reit.

In the first place, they are demanding that the manager of Sabana Reit foot the entire cost of the failed merger with ESR-Reit - which they estimate to be S$2.7 million.

On top of that, they are insisting that ESR Cayman should have no say in the nomination of any independent directors to the board of Sabana Reit' s manager. " Otherwise, this can be interpreted as ' control' over the business affairs and strategic directions of Sabana Reit," they added, in the letter.

Yet, for many investors, the strategic backing of a corporate group like ESR Cayman is not a bad thing, especially when it comes to sourcing for promising assets outside of Singapore.

Indeed, beyond improving the revenue generating potential of its existing assets, Sabana Reit' s perceived ability to acquire additional properties with growth potential could be an important driver of the market valuation of its units.

Euthanise Sabana Reit?

Before going any further, let me emphasise that Quarz and Black Crane should be applauded for their effort in blocking the merger of Sabana Reit and ESR-Reit, which are both controlled by ESR Cayman.

The deal would have seen investors exchanging units in Sabana Reit for units in ESR-Reit on terms that valued Sabana Reit at a steep discount to its book value, just before upside from NTP+ kicked in.

Moreover, the distrust that Quarz and Black Crane are displaying towards Sabana Reit' s manager is not unwarranted. After all, if the manager could not see how the proposed merger with ESR-Reit would have destroyed value for unitholders of Sabana Reit, it stands to reason that any deals it recommends in the future may well be similarly flawed.

Yet, without the prospect of a steady stream of acquisitions, Sabana Reit' s growth would be limited and its currently elevated DPU yields may not compress to the levels of leading industrial property Reits.

For minority investors of Sabana Reit, the best outcome now might well be if ESR Cayman came to the realisation that Sabana Reit' s likely usefulness as an asset securitisation platform has been badly impaired, and that it is time to put an end to all the misery it is causing.

ESR Cayman could perhaps explore the possibility of making an offer for Sabana Reit' s S$840 million portfolio, optimising the value of each property, and eventually looking for profitable exit opportunities. Meanwhile, Sabana Reit could be wound up and any funds returned to unitholders.

Euthanising Sabana Reit and paying off its irate unitholders would also leave ESR Cayman with just one Singapore-listed Reit, putting an end to questions about their overlapping interests.

Best of all, unitholders of Sabana Reit would have the opportunity to immediately monetise their units, potentially at a price that is closer to its book value of S$0.51 per unit. They could then use the proceeds to invest in the leading industrial property Reits in the local market, which have growth prospects that are probably far superior to Sabana Reit.
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johnwongzz
Senior
27-Jan-2021 17:40     
 
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 Alert Admin 		DBS on Sabana REIT (25 Jan 2021)

Price Target: S$0.45

Turning a new page

Investment Thesis
New Tech Park+ completion to deliver a boost to FY21F and FY22F earnings. The completion of asset enhancement works at New Tech Park+ (NTP+) could add c.S$3.5m to Sabana REIT& rsquo s revenue and boost occupancies at the REIT& rsquo s & ldquo Crown Jewel& rdquo .

Targeted asset enhancements to drive growth. Rejuvenation works such as at 23 Serangoon North Ave 5 to support tenant acquisition efforts.

Improved ESR-REIT offer may be on the cards. ESR-REIT has left open the option of acquiring Sabana REIT in the future. Still, regulations prevent ESR-REIT from making another offer within 12 months.

Valuation:
Maintain BUY with higher TP of S$0.45. Our TP of S$0.45 is based on DCF with a WACC of 6.8%. This differs from our previous update where our valuation was pegged to 0.94x of ESR REIT& rsquo s target price due to the proposed merger.

Where we differ:
We are the only house covering the stock. That said, we have assumed an uplift in earnings in FY21F and FY22F driven by the completion of NTP+.

Key Risks to Our View:
A second COVID-19 wave in Singapore could result in another round of COVID-19 relief measures that will dent DPU as seen in 1H20.

2H20 financials show improvement
  • 2H20 revenue and net property income (NPI) improved h-o-h to S$37.4m (+9.3% h-o-h, -5.5% y-o-y) and S$23.8m (+14.0% h-o-h, -11.7% y-o-y) respectively as Sabana REIT recovered from the COVID-19 lockdown in 1H20.
  • However, revenue and NPI was still poorer compared to FY19 due to lower contribution from 10 Changi South Street 2 as a result of the termination of a master lease in 2H19 and higher allowances for impairment losses on receivables.
  • In line with revenue and NPI, 2H20 DPU rose to 2.29 Scts (includes 0.58 Scts withheld in 1H20) from 0.47 Scts in 1H20.
  • Gearing inched down by 0.2 ppt to 33.5% as at end-2H20 while financing costs dipped 3.1% due to the low interest rate environment.

Operational metrics stabilise with key overhang removed
  • FY20 portfolio occupancy rose to 76.5% from 75.4% in the previous year while rental reversion was at +0.9% compared to -0.7% in FY19.
  • Portfolio WALE as at end-2H20 was 3.1 years increasing from 2.7 years as at 1H20
  • A key overhang in the form of large lease expiries was addressed in FY20. Back in FY19, 42.4% of leases by NLA were due to expire in FY20. The situation did not improve substantially as at end-1H20 with 26.4% of leases by gross rental income due to expire in FY20. However, the situation has improved with occupancies rising in FY20 and FY21F lease expiries now standing at 21.6% of gross rental income as at end-FY20.
  • & bull Overall, Sabana REIT performed respectably in FY20 considering the COVID-19 outbreak and large lease expiries it faced.

Merger plans paused but ESR open to future combination
  • Sabana REIT& rsquo s shareholders voted against the merger with ESR-REIT in 2H20 as the offer price was deemed inadequate.
  • Going forward, Sabana REIT will continue its & ldquo Refreshed Strategy& rdquo of divesting non-performing assets and undertaking asset enhancement initiatives (AEI) for selected properties.
  • ESR-REIT has stated that it remains open to a future merger although regulations do not allow another offer to be made within a 12-month window.

Sabana likely to see better year ahead
  • Sabana REIT should see a recovery in FY21 helped by rental contributions from the completion of the AEI at 151 Lorong Chuan (NTP) and a lower base that was impacted by higher allowances for receivables impairment.
  • New Tech Park+ completion could contribute additional c.S$3.5m to topline and enhance the property& rsquo s occupancy.
  • We also do not foresee Sabana REIT making any significant acquisitions during the year with the Sponsor likely to prioritise ESR-REIT for any injections.
  • An improved merger offer from ESR-REIT may also be on the cards with ESR-REIT& rsquo s CEO discussing the possibility and e-Shang Infinity Cayman continuing to hold a sizable stake in Sabana REIT.

Maintain BUY with higher TP of S$0.45.
Despite facing large lease expiries in FY20 and the COVID-19 outbreak, Sabana REIT& rsquo s portfolio occupancy improved. However, NPI was slightly lower than forecast on higher allowances for impairments on receivables. As the merger with ESR-REIT has fallen through, we raise our TP to S$0.45 as we return to a DCF-based valuation for Sabana REIT (vs the previous valuation which was pegged to 0.94x our target price for ESR-REIT).
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Starship
Supreme
01-Jan-2021 18:18     
 
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Sgsginvestor5      ( Date: 01-Jan-2021 18:09) Posted:

Happy New Year to all fellow Sabana shareholders!
May we all huat in 2021!
Kick out the manager and increase share price and dividend!
Best of health and happiness to all of you!
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Sgsginvestor5
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01-Jan 18:09     
 
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 Alert Admin 		Happy New Year to all fellow Sabana shareholders!
May we all huat in 2021!
Kick out the manager and increase share price and dividend!
Best of health and happiness to all of you!
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Sgsginvestor5
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30-Nov-2020 11:34     
 
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 Alert Admin 		Stop trying to confuse unitholders
Removal of manager is a simple majority 50-50 vote

The REIT Manager can be removed by a resolution passed by a majority (50%) of unitholders present and voting at a meeting of unitholders duly convened and held. A general meeting may be convened at the request in writing of not less than 50 participants or participants representing not less than 10% of the issued units in the REIT. At such a meeting, if voting is taken on a poll, each unitholder is entitled to one vote based on the unitholdings of each attendee. If voting is by show of hands, each attendee will have one vote. 

Which means that if minority unitholders vote down the proposed merger, it is very likely they will have the 24% vote altogether to get rid of the manager. After all everybody gets 7+% increase in dividend from the internalisation of manager. Profit from the manager is redirected to all unitholders

This means that ESR will either have to buy more shares to protect the manager, or minority investors get rid of the manager, enjoy higher DPU from no management fees paid, and even higher DPU from better execution. Win WIn!!

 
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lukewong82
Master
30-Nov-2020 09:04     
 
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 Alert Admin 		ESR has around 30% of the shares. If the merger fails , I pretty sure the current management of sabana will still continue to be there and perhaps no improvement to the performance and the NTA may then drop and drop from 59 cents becomes  51 cents then becomes 41 cents. Then next year ESR launch another merger bid, this time sabana only 41 cents, so ESR will offer lesser . Then shareholders will cry and regret why never agree to the merger now.

Next the funds keep saying they want to remove the manager and install internal maganer BUT in order to do that, they need to have  > 75% yes in an EGM. BUT ESR HAS ALMOST 30%, they sure vote no. So how to remove the manager?

So it means small investors of sabana will be stuck with a manager that is not performing well and then see the NTA sinking and sinking, in the end, the next merger offer will be worse then cry lo..
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Joelton
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30-Sep-2021 02:08     
 
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Sabana-ESR-Reit merger: Minority unitholders should make voices heard
IT is not often that minority shareholders get the chance to determine the outcome of a significant corporate deal, but the proposed merger between Sabana Shari' ah Compliant Industrial Real Estate Investment Trust (Sabana Reit) and ESR-Reit is one such instance since substantial shareholders, both managers and concert parties will abstain from voting.
 
It is crucial to note that although Sabana Reit' s and ESR-Reit' s extraordinary general meetings will be held on Dec 4, these are online meetings. This means that voting will be by proxy, which in turn means that the relevant forms have to be submitted by 10am on Dec 1.
 
A key point of contention has been the scheme consideration, which implies a discount to Sabana Reit' s net asset value (NAV) per unit. Some have said that it undervalues the Reit. But both Sabana Reit' s and ESR-Reit' s managers say that the discount is reflective of how the market has valued Sabana Reit over the years, and that the implied offer price actually represents a premium to Sabana Reit' s last traded price prior to the announcement of the deal.
 
Whilst NAV is an important metric, the managers argue that unitholders should consider the transaction rationale and distribution per unit (DPU) accretion as well.
 
They have added that the 12.9 per cent DPU accretion Sabana Reit unitholders will get from the merger, on a historical pro forma basis, is the highest among all S-Reit mergers to-date.
 
On the other hand, activist investors Quarz Capital and Black Crane Capital contend that the discount to NAV is substantial when compared with all Reit transactions in the past 18 years.
 
Sabana Reit has said since it conducted a strategic review in 2017, the ESR-Reit merger is the only offer it has received. Quarz and Black Crane, however, have described Sabana Reit' s current portfolio as having a " sizeable footprint in the attractive Singapore industrial property sector' ' while adding that they are optimistic of finding another buyer.
 
Quarz and Black Crane have proposed internalising Sabana Reit' s management function and to set this up along the lines of NetLink Trust. Sabana Reit, on the other hand, said internalisation could put unitholders at real risk.
 
From the above, unitholders would rightly conclude that the issue boils down to whether they should place their faith in the existing management or go with Quarz and Black Crane who believe their way offers everyone better prospects.
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savesabanareit
Member
29-Nov-2020 18:16     
 
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 Alert Admin 		Rebuttal letters and PPT to Sabana REIT Manager

Letter
https://drive.google.com/file/d/1x09eimh79T72eY_0mIndzfFvIcLTdzuv/view?usp=sharing

PPT
https://drive.google.com/file/d/1gU22uFy9nd32IhKajoGJTjZKM2SOBMm8/view?usp=sharing
 
VOTE AGAINST THE Proposed Value Destructive Merger
 
Sabana unitholders will receive less DPU in the Proposed Merger AND MORE DPU in standalone Sabana in 2021E. The potential > 27% increase in DPU in 2021E (8.5% Dvd Yld) from the standalone Sabana REIT are from:
  • Retail component at 151 Lorong Chuan +DPU of 0.301 cents (+13% DPU)
  • Occupancy rate increase from 77% to 80.2% in 3Q2020 +DPU ~0.16 cents (+ 6.7% DPU)
  • Financing cost decrease from 3.8% to 3.2% in 3Q2020 +DPU ~0.17 cents (+7.2% DPU)
 
A number of sizeable levers can still be executed to further increase DPU and unit price :
  • Expedite on redevelopment of 151 Lorong Chuan and 33& 35 Penjuru Lane
  • Cost savings through internalization of REIT Manager (+ ~7.5% DPU)
  • Buy yield accretive assets and increase leverage to 36% on NAV of S$0.551 (+ ~5% DPU)
  • Explore sale of the REIT or its assets for cash at close to NAV (+ ~40% potential upside)
     

    For Both forms:
    1.            Fill in your NAME and NRIC or PASSPORT NUMBER
    2.            Fill in the ADDRESS which you register your CDP account under
    3.         Tick & radic the box to indicate you vote AGAINST the approval of the Trust deed amendments (Proxy Form A) and scheme (Proxy Form B) 
    4.            Fill in the TOTAL NUMBER OF SABANA UNITS you hold and the DATE
    5.            SIGN at the bottom of the both forms

    B.)      Scan both forms, attach to email and send it to the below email address:
    [email protected] before    The latest time to EMAIL the 2 forms together is before 2.30pm on Tuesday 1st December 2020.

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Peter88
Senior
29-Nov-2020 17:56     
 
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 Alert Admin 		If dpu decrease after merge , who will vote in favour of the merge , must be silly to do this .

savesabanareit      ( Date: 29-Nov-2020 17:52) Posted:

--- Post Removed by User ---
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Peter88
Senior
29-Nov-2020 16:23     
 
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 Alert Admin 		What will be the dpu after the merge ? Increase ?

John2020      ( Date: 29-Nov-2020 16:15) Posted:

Depending on your position, I think. For me, it' s profitable, both in short and long. However, I do understand several bro and sis here have overly different position, based on the discussions. The only thing confuses me is, pre covid, 1 sabana ~ 0.82 ESR unit, now the offer is 0.94 ESR, why veto? But,  I fully respect their position/opinions even though I could not get some of their points

Peter88      ( Date: 29-Nov-2020 15:57) Posted:

So just one simple question , merge is good or not good to unitholders of sabana


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John2020
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29-Nov-2020 16:15     
 
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 Alert Admin 		Depending on your position, I think. For me, it' s profitable, both in short and long. However, I do understand several bro and sis here have overly different position, based on the discussions. The only thing confuses me is, pre covid, 1 sabana ~ 0.82 ESR unit, now the offer is 0.94 ESR, why veto? But,  I fully respect their position/opinions even though I could not get some of their points

Peter88      ( Date: 29-Nov-2020 15:57) Posted:

So just one simple question , merge is good or not good to unitholders of sabana ?

John2020      ( Date: 29-Nov-2020 15:45) Posted:

A good manager should be able to change his view/decision as quick with the market movement, otherwise we lose money. Look at SMM, before June 2019 > $1, before Feb 2020 > $0.80, before June 2020 40-50 cents, before demerge > 20 cents, then all the way to 11 cents.... some people even hold it from $2 plus.... Can we expect anyone to get them out at any price above 40cents now?? I' m afraid not, unfortunately. That' s why I do not believe any illusions but the current facts and a simple math... just sharing personal opinion, no offense to any   bro or sis here. Vested to
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Peter88
Senior
29-Nov-2020 15:57     
 
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 Alert Admin 		So just one simple question , merge is good or not good to unitholders of sabana ?

John2020      ( Date: 29-Nov-2020 15:45) Posted:

A good manager should be able to change his view/decision as quick with the market movement, otherwise we lose money. Look at SMM, before June 2019 > $1, before Feb 2020 > $0.80, before June 2020 40-50 cents, before demerge > 20 cents, then all the way to 11 cents.... some people even hold it from $2 plus.... Can we expect anyone to get them out at any price above 40cents now?? I' m afraid not, unfortunately. That' s why I do not believe any illusions but the current facts and a simple math... just sharing personal opinion, no offense to any   bro or sis here. Vested too

Peter88      ( Date: 29-Nov-2020 08:59) Posted:

This Han fellow seems to be twisting what he said earlier


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John2020
Member
29-Nov-2020 15:45     
 
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 Alert Admin 		A good manager should be able to change his view/decision as quick with the market movement, otherwise we lose money. Look at SMM, before June 2019 > $1, before Feb 2020 > $0.80, before June 2020 40-50 cents, before demerge > 20 cents, then all the way to 11 cents.... some people even hold it from $2 plus.... Can we expect anyone to get them out at any price above 40cents now?? I' m afraid not, unfortunately. That' s why I do not believe any illusions but the current facts and a simple math... just sharing personal opinion, no offense to any   bro or sis here. Vested too

Peter88      ( Date: 29-Nov-2020 08:59) Posted:

This Han fellow seems to be twisting what he said earlier ?

John2020      ( Date: 29-Nov-2020 00:14) Posted:

In the statement by managers, if merger agreed, the retained DPU will be paid to us as a clear-up step BEFORE merger, right? vested
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Sgsginvestor5
Member
29-Nov-2020 14:55     
 
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 Alert Admin 		Manager cannot be trusted.

1 year ago, he was positive about the REIT and new Tech Park, now he just wants to give everything free to ESR. Even though we pay his salary, it is quite clear he is not on our side. High chance if vote yes, he will again make more of the retained DPU and rental from july to Dec go to ESR claiming provisions etc...

VOTE AGAINST TO Make sure this doesnt happen 
Every vote counts!
 
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