Sabana Shari'ah REIT

[specuvestor]

^^ renewal of CMS license is not performance based, it is compliance based

I've seen articles talking about declining yields and hence DPU as the problem. That's not the problem; that's the symptom. The problem is the master lease yield or rental guarantee are not market rates, which they use to price the asset.

See this directory for the 38 minus 1 REIT managers currently licensed that can take over
https://masnetsvc.mas.gov.sg/FID.html

My 2cts

[ACTIVIST SPEAKS]

VOTE OUT SABANA MANAGER!!!

https://www.facebook.com/groups/15863995...0/?qsefr=1

[tanjm]

I'm just wondering if you think the benefit would accrue simply from paying less fees (and how that would impact DPU) by way of internalizing, or are you thinking that an alternative manager would do better to increase the DPU or realize the asset value? What is the key criteria post change?

[newyorkcityboy]

Will the sponsor Vibrant renew the master leases if their manager is removed?

Without a tenant, the value of those properties is likely to fall rather sharply.

[ACTIVIST SPEAKS]

Very good question. We are for internalization but definitely not with this present group of people. The cost benefits of internalization is immediate. And many correctly pointed out the difficulty of getting someone with ten years experience to head it bearing in mind, 10 years ago, there were only 4 REITs. And the first REIT was listed only 14 years ago.

If we are able to remove the manager but the internalization is not approved (no qualified CEO), we will rather push for winding up than to have the present team continue running it (Code dictates there must be a manager at all times).

From the wordings of Sabana's last announcement, it appears that they are going to propose internalization of their present team (like Croesus). We think telling a wolf to eat less chicken in a coop is never a long term solution.

Please consider joining the facebook with questions like this that really address the issue.

https://www.facebook.com/groups/15863995...0/?qsefr=1

http://sabanareit.blogspot.sg/

[ACTIVIST SPEAKS]

The more fundamental question is why Sabana Reits is in such a position...... Separate and independent valuation reports, justifying significantly higher price paid, using acceptable desktop valuation methods, calculating with artificially prop up rental support, giving carbon copy valuation to a property purchased by a REIT is our biggest problem.

Kevin X will not personally buy an overprized apartment which promise a three year guaranteed high rental but he has no qualms about buying a industrial property with an artificially supported rental at a high price for the REIT. This is our fundamental problem. Every other thing is just a distraction. Hope you see my point. Again, I ask both of you to join our FB with questions like this for everybody to answer. After all, it is only my opinion here.

There are many sad stories in this, I urge you to use your knowledge to help.

[tanjm]

Very good question.  We are for internalization but definitely not with this present group of people.  The cost benefits of internalization is immediate.  And many correctly pointed out the difficulty of getting someone with ten years experience to head it bearing in mind, 10 years ago, there were only 4 REITs.  And the first REIT was listed only 14 years ago.  

If we are able to remove the manager but the internalization is not approved (no qualified CEO), we will rather push for winding up than to have the present team continue running it (Code dictates there must be a manager at all times).

From the wordings of Sabana's last announcement, it appears that they are going to propose internalization of their present team (like Croesus).  We think telling a wolf to eat less chicken in a coop is never a long term solution.

Please consider joining the facebook with  questions like this that really address the issue.

https://www.facebook.com/groups/15863995...0/?qsefr=1

http://sabanareit.blogspot.sg/

I don't own any units of Sabana, so I'm mainly curious. Let me rephrase, and add on some points to ponder.

You say that the manager currently takes too much fees. Have you calculated how much you will save in terms of cents per unit share? How bad are the fees compared with another REIT? If you internalize the manager, how will you incentivize them to do better?

Or do you think the current managers are simply doing a bad job? why would another prospective manager want to take over - especially if you reduce fees or demand that the management is internalized?

Have you considered that winding up the REIT is not easy and can take some time without getting bad prices for the properties? How will you ensure that the manager appointed to oversee this unwind will be incentivized to do a good job?

If you own 100,000 units of Sabana, and you can realize only an additional 20 cents per share from this difficult action which may not succeed, is the rational cost benefit worth it, without considering your sunk cost?

Ask yourself: If the share price of Sabana is way below fair price, why has it not received a general buyout or merger offer from an external entity? 

As an general observation (caveat: i did not check the current regulations) : the regulator may want to consider explicitly allowing shareholders vote to retain a manager every X years (possibly X=1) in an AGM. Also to give powers to the trustee to entertain applications by other property managers to bid for getting to manage the REIT.

[ACTIVIST SPEAKS]

I think you got the wrong idea about us.  We are just 50 retail investors who are not happy with the Manager's performance.  The code provides that we can convene a meeting to remove the manager.  We are who we are and we never try to be what we are not.  We have no expertise and I cannot answer any of your question.  
Right from the start, we are of the view that HSBC Trustee and MAS will be in charge of the follow-up action.  We are here to decide only one thing - REMOVE THE MANAGER OR KEEP THE MANAGER.  If we cannot remove the manager, we rather liquidate and take back our money.....just like a investment trust/unit trust.  Logic will tell you that there is no way MAS will allow a group of unlicensed motley crew (I am talking about us) decides the fate of a $800m REIT owned by more than 30,000 unitholders.  MAS just allow us to decide 2 things....remove or keep the Manager  +  wind up or not.  Surely, you do not think MAS expects the 50 of us to do the execution.  We provide our choice and our vote. MAS is not asking us for the solution and neither will they let us do what we desire.

[ACTIVIST SPEAKS]

In Oct 2014, MAS had a consultation proposing exactly what you said about the frequency of a manager appointment. The respondent (mainly REIT manager) argued that there will be transitional problem (also like what you just said) and MAS watered down this proposal to leave it exactly what it is now.

[brattzz]

The more fundamental question is why Sabana Reits is in such a position......  Separate and independent valuation reports, justifying significantly higher price paid, using acceptable desktop valuation methods, calculating with artificially prop up rental support, giving carbon copy valuation to a property purchased by a REIT is our biggest problem.

Kevin X will not personally buy an overprized apartment which promise a three year guaranteed high rental but he has no qualms about buying a industrial property with an artificially supported rental at a high price for the REIT.  This is our fundamental problem.  Every other thing is just a distraction.  Hope you see my point.  Again, I ask both of you to join our FB with questions like this for everybody to answer.  After all, it is only my opinion here.

There are many sad stories in this, I urge you to use your knowledge to help.

very good points, i support your views, (but i am not vested)

I just hope you all have enough votes to put your plans into action.

Good luck!!