SINGAPORE (Feb 10): The rising stock of a company is a good thing for its management, signalling better earnings and bonuses.

But in the case of Sabana REIT, a rising unit price could very well mean putting its current manager out of a job.

On Feb 6, 66 dissident minority unitholders holding a 0.6% stake in the REIT filed a requisition for an EGM.

The resolutions for the EGM include voting out the current manager.

If the resolution to vote out the current manager is not passed, the dissident unitholders want to put forward resolutions to divest the REIT&rsquo s properties and return the cash to unitholders.

To recap, Sabana REIT was listed in 2010 at an IPO price of $1.05, with 15 industrial properties valued at $851 million.

Of these, five properties were injected by Vibrant Group under a sale-and-leaseback arrangement for a term of five years on a triple-net basis.

As the master leases started to expire in late 2013, the REIT faced the challenge of managing multiple tenants and was saddled with maintenance costs and property taxes.

This weighed on Sabana REIT&rsquo s DPUs in the years that followed.

Things seemed to come to a head late last year.

In December, Sabana REIT unveiled a 42-for-100 rights issue of 310.7 million new units at 25.8 cents each.

The rights price was a 48.9% discount to its price of 50.5 cents on Dec 19 and a 40.3% discount to the theoretical ex-rights price of 43.2 cents.

The same month, Sabana REIT said it would acquire three more properties costing $77 million but none of the three properties will be immediately yield-accretive, despite two of them being purchased with income-support packages.

Despite rising some 24% since the start of the year, Sabana REIT is trading at a 27% discount to post-rights net asset value.

At the moment, Vibrant Group is the single-largest unitholder of Sabana REIT and will likely vote against the resolutions at the EGM.

And besides Chinese property tycoon Tong Jinquan, there does not appear to be any other party with a substantial stake in the REIT.

But if Sabana REIT&rsquo s unit price starts to run, that could change the composition of Sabana REIT&rsquo s unitholders, enabling the dissidents to muster enough support to pass their resolutions.

That would provide a precedent for investors in other underperforming REITs to hold their managers to account in a similar way.

To read the full story, get this week&rsquo s issue of The Edge Singapore (Issue No. 766 of Feb 13) which is on sale now.