Sabana Shari'ah REIT

[jovialger]

3. DETAILS OF THE ACQUISITION AND LEASE (THE “TRANSACTION”)
The Property is being sold on a sale and leaseback basis wherein the Vendor will, upon completion of
the acquisition of the Property, take a master lease of the entire premises for a term of three years on a triple net basis (the “Lease”).
The purchase consideration for the Property is S$39,800,000.00 (the “Purchase Consideration”)
which was arrived at on a willing buyer and willing seller basis.

What is the meaning of the words hilighted in red ? Pls help to enlighten.

Hi, that just means the purchase price they are paying is $39.8m, which is the same as valuation done on the property. In fact, all 3 latest acquisitions are purchased at valuation (which is OK), and they all come soon after they receive the recent credit rating. I suppose they have been waiting to get the lower interest rates (from credit rating) before proceeding with these purchases.

The next question I want to know is whether such purchases would be yield accretive or not, but the press releases did not mention these information.

Also, would it be better to wait for "cheaper prices" before they rush to buy, or to rush to "buy now"? That depends on whether 1) they are good managers (getting more value for unit-holders) or working for self interest (getting more management fee from bigger asset size), and 2) their views of the property market.

[Stocker]

3. DETAILS OF THE ACQUISITION AND LEASE (THE “TRANSACTION”)
The Property is being sold on a sale and leaseback basis wherein the Vendor will, upon completion of
the acquisition of the Property, take a master lease of the entire premises for a term of three years on a triple net basis (the “Lease”).
The purchase consideration for the Property is S$39,800,000.00 (the “Purchase Consideration”)
which was arrived at on a willing buyer and willing seller basis.

What is the meaning of the words hilighted in red ? Pls help to enlighten.

Hi, that just means the purchase price they are paying is $39.8m, which is the same as valuation done on the property. In fact, all 3 latest acquisitions are purchased at valuation (which is OK), and they all come soon after they receive the recent credit rating. I suppose they have been waiting to get the lower interest rates (from credit rating) before proceeding with these purchases.

The next question I want to know is whether such purchases would be yield accretive or not, but the press releases did not mention these information.

Also, would it be better to wait for "cheaper prices" before they rush to buy, or to rush to "buy now"? That depends on whether 1) they are good managers (getting more value for unit-holders) or working for self interest (getting more management fee from bigger asset size), and 2) their views of the property market.

They made a rather standard statement announced thru SGX , its stated , Believed to be yield-accretion.

[desang]

Anyone has any idea how or where we can get information on the property yield that the 2 new acquisitions bring? Also need to know what is the interest rate for the loan which they are now getting to purchase these 2 properties.

If someone already has this information, could you pls post it?

[Stocker]

I have emailed Bobby Tay on the subjects that we discussed. Hope some friends here can do the same and let the manager aware of the unitholders' anxieties. His contact is as follow;


Bobby Tay Chiew Sheng
Chief Strategy Officer & Head of Investor Relations
Sabana Real Estate Investment Management Pte. Ltd.
DID: +65 6580 7768
Email: bobby.tay@sabana.com.sg

[jovialger]

I have emailed Bobby Tay on the subjects that we discussed. Hope some friends here can do the same and let the manager aware of the unitholders' anxieties. His contact is as follow;


Bobby Tay Chiew Sheng
Chief Strategy Officer & Head of Investor Relations
Sabana Real Estate Investment Management Pte. Ltd.
DID: +65 6580 7768
Email: bobby.tay@sabana.com.sg

Hi, I have also emailed Bobby, let's see if he will reply. By the way, I read the press releases again, and they are SILENT on whether these purchases are yield-accretive or not, only indicate that they help to lengthen the average lease expiry of the whole portfolio.

[Stocker]

6. RATIONALE FOR THE TRANSACTION
The Manager believes that the Transaction will bring the following benefits to holders of units in
Sabana REIT (“Unitholders”):
a. In line with Manager’s Strategy
The Transaction is in line with the Manager’s aim to invest in income-producing real estate and
real-estate related assets used for industrial purposes in Asia which provide attractive cash
flows, yield-accretion and capital growth opportunities so as to generate stable and growing
returns to Unitholders

[jovialger]

6. RATIONALE FOR THE TRANSACTION
The Manager believes that the Transaction will bring the following benefits to holders of units in
Sabana REIT (“Unitholders”):
a. In line with Manager’s Strategy
The Transaction is in line with the Manager’s aim to invest in income-producing real estate and
real-estate related assets used for industrial purposes in Asia which provide attractive cash
flows, yield-accretion and capital growth opportunities so as to generate stable and growing
returns to Unitholders

This is like "hidden" within the overall Strategic Statement, but not explicitly mentioned in the benefits under a subsequent paragraph (where they talk about benefits in extending the average lease expiry), so I would want to see confirmation of this from IR regarding this fact.

[Stocker]

a term of three years on a triple net basis

What is the meaning of " a triple net basis " ?

[desang]

a term of three years on a triple net basis

What is the meaning of " a triple net basis " ?

Triple net lease means the lessee pays for the rent, maintenance, land rent, property tax and insurance on the
respective properties.

[Stocker]

Maintain Buy recommendation with unchanged target price of $1.120 by PhillipCap.

http://www.remisiers.org/cms_images/rese...091311.pdf

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Base on Phillipcap report, if DPU accretive , why DPU in 2013 drop from 8.61 cents to 8.53 cents , from year 2012 ?