Sabana Shari'ah REIT

Master tenants pay for all maintenance , etc etc. Manager no need to deal with sub-tenants , now everything fall on Sabana. How to expect DPU will not be hit .

It's confirmed. The lease renewed in kallang way, the space freed up is due to MASTER LEASEE MOVING OUT, not existing space, my hypothesis is wrong.

But the NLA will not increase further. See below for reply from Sabana.

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Dear Mike

Thank you for your email. Please see our responses to your questions in brackets below. Thank you for your support for Sabana REIT and please let me know if you have more questions.

Kind Regards
Grace Chen

-----Original Message-----

Sent: Friday, 18 October, 2013 10:42 AM
To: Grace Chen
Cc: Enquiry; Bobby Tay
Subject: Renewal of leases

Dear Bobby and Grace,

Congratulations to the successful completion of shares placement and the acquisition of 508 Chai CHee.

I refer to your 3q results release yesterday, I hope u can answer some of my questions.

1) which master lease, specifically is being renewed? And what is the rental revision terms like? [ Master lease at 3 Kallang Way 2A is being renewed at a slightly higher rate. ]

2) the 233058 sq feet of NLA free up after 25 November, is it due to tenants moving out or is it the existing vacant space of the master leases yet to be leased? [ The 233,058 sq ft comprises primarily space to be returned to Sabana REIT by existing master tenants who decide not to renew their master lease. ]

3) After 25 November, any of your former master lessee moving out, and not renewing the lease under multi-tenant terms. If they are indeed moving out, does your 233058 sq ft NLA inclusive of those? [ Please see reply to question 2 above. ]

4) There are 2 single tenant building, ( from prospectus), 2A kallang way and 8 commonwealth lane, given that either 1 will not be renewing the master lease, it means some uncomfortable possibilities. [ Please see reply to question 2 above. ]
1) they Are moving out. Back to qn3
2) there are plenty of non-utilized space and they wanted a smaller space for savings.

To prevent too much unnecessary speculation among the investing community, perhaps u can help provide some details. I believe non-renewal of anchor tenants is material information.

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Their investor relation is doing a good job though.

i m just wondering , how badly would the DPU be affected in the worst case scenario considering if the renewals were not done in favor of sabana

(18-10-2013, 06:28 PM)Greenrookie Wrote: It's confirmed. The lease renewed in kallang way, the space freed up is due to MASTER LEASEE MOVING OUT, not existing space, my hypothesis is wrong.

But the NLA will not increase further. See below for reply from Sabana.

Thanks for sharing, very good info, but the manager should also prepare a forecast to clarify the potential impacts from the conversions, how much revenues/costs/profits be affected. From my calculation, just the 8 Commonwealth alone, which accounted roughly 140-150k NLA, we should expect about 0.8c reduction in annual DPU if it remains vacant for whole 2014. This is still acceptable for me.

I would take some money off the table now at $1.10 & see what unfolds in the next quarter

(18-10-2013, 10:52 PM)valuebuddies Wrote:

(18-10-2013, 06:28 PM)Greenrookie Wrote: It's confirmed. The lease renewed in kallang way, the space freed up is due to MASTER LEASEE MOVING OUT, not existing space, my hypothesis is wrong.

But the NLA will not increase further. See below for reply from Sabana.

Thanks for sharing, very good info, but the manager should also prepare a forecast to clarify the potential impacts from the conversions, how much revenues/costs/profits be affected. From my calculation, just the 8 Commonwealth alone, which accounted roughly 140-150k NLA, we should expect about 0.8c reduction in annual DPU if it remains vacant for whole 2014. This is still acceptable for me.

The puzzling thing is: If all the master leases except Foon Tat at Kallang Way move out, why is area free up only 230K? As you say, Common wealth alone with take away the bulk, and 90K from 3 master leases? Including City development, etc.. Hmm... I always thought the master leaser will take up at least 30% of the building...

The manager only told him this but not that. Half truth ?

(18-10-2013, 11:49 PM)Greenrookie Wrote: The puzzling thing is: If all the master leases except Foon Tat at Kallang Way move out, why is area free up only 230K? As you say, Common wealth alone with take away the bulk, and 90K from 3 master leases? Including City development, etc.. Hmm... I always thought the master leaser will take up at least 30% of the building...

" space to be returned to Sabana REIT by existing master tenants who decide not to renew their master lease ": I interpret it as the master tenants decided not to renew the master leases but continue to stay in the buildings on multi-tenanted leases basis. So, 90k sqft is probably those existing vacant units that Sabana took over from the 4 master tenants.

Project:
Save Neira Ng

"The total amount of
S$28,754
allocated to the project above represents less than
0.2%
of
Sabana REIT’s 3Q 2013 gross revenue."

I thought this is amazing. How bad can the manager be ?

(24-10-2013, 01:27 AM)corydorus Wrote: Project:
Save Neira Ng

"The total amount of
S$28,754
allocated to the project above represents less than
0.2%
of
Sabana REIT’s 3Q 2013 gross revenue."

I thought this is amazing. How bad can the manager be ?

I like companies that do social good.

In this case, the credit goes to the structure of shariah compliant reit, since it is Mandated that rent collected from business that might not be shariah compliant must be donated.

It is not due to the altruistic motive of the manager, but since they are giving money away, I am glad to look where they are donating instead of just finding a organization to "dump" their shariah "noncompliance" money