Soilbuild Business Space REIT

[freedom]

Til today, I still can't understand the weak sponsor argument. See where Sabana is trading now. I think freightlink is not any better than soilbuild.

See what happened to the Aussie cowboys ones (MI-REIT, Allco, MMP) during the '08 crisis? While most of the other REITs start to recover in the '09 rebound, these remained battered for a longer period and their stake + mgmt co. were finally sold to others, who'd to come in to clean up the mess...

In the case of Sabana, Freight Links, despite a rather weak Balance Sheet back then, was able to survive their own crisis (not '08 one as Sabana was listed only on Nov-10). I guess the proceeds from selling their Industrial assets to the REIT helped in a large way to strengthen their Balance Sheet. On top of that, profitability also improved, perhaps lower Finance expenses from borrowings (I didn't study in detail). At the same time, the Kua brothers were also buying up some of the Sabana shares from the open market. Who knows what'd have happened if Freight Links had collapsed financially?

Still, Sabana shares continued to slide from $1.05 to the 80s for aro' 1 year. It took ~ 2 years before it recovered above IPO price.

So, the key is perhaps, a financially stronger sponsor (eg. Temasek linked or Blue Chip linked like F&N, CDL) gives better confidence of stability and ability to survive a crisis. Whether real or perceived (since the REIT is supposed to be a separate entity), the market voting machine will still dominate and in this case, perhaps last longer than many of us can remain patient / solvent (if geared)... haha..

Soilbuild looks financially stronger than Freight Links, at least the owner anyway, who must have gotten very rich from all the IPOs.... Still, the credentials and pedigree is not as established and presents uncertainty... That means opportunity... if you think it's worth the risk?

CCT/CMT has Capitaland backing, and I don't see how it fared any better than MI-REIT, Allco or MMP. In the same way, I don't see Citi group had done any better than Lehman Brothers, though Citi group was bailed out by the US government and Lehman Brothers was bankrupted. A bad managed REIT is just a bad managed REIT. It really does not matter that much whether it got big companies backing or not. A well-managed REIT will do well no matter got strong backing or not.

Correct me if I am wrong, CCT/CMT are among the worst-performed REITs after the financial crisis. CCT has to divest its properties to save itself further. CMT does not take any advantages in the difficult times to acquire good income generating assets, either. To me, they fail badly even with strong backing.

Sponsors might matter if the REIT intends to do badly. Then no one should try to invest into it.

[Greenrookie]

Til today, I still can't understand the weak sponsor argument. See where Sabana is trading now. I think freightlink is not any better than soilbuild.

See what happened to the Aussie cowboys ones (MI-REIT, Allco, MMP) during the '08 crisis? While most of the other REITs start to recover in the '09 rebound, these remained battered for a longer period and their stake + mgmt co. were finally sold to others, who'd to come in to clean up the mess...

In the case of Sabana, Freight Links, despite a rather weak Balance Sheet back then, was able to survive their own crisis (not '08 one as Sabana was listed only on Nov-10). I guess the proceeds from selling their Industrial assets to the REIT helped in a large way to strengthen their Balance Sheet. On top of that, profitability also improved, perhaps lower Finance expenses from borrowings (I didn't study in detail). At the same time, the Kua brothers were also buying up some of the Sabana shares from the open market. Who knows what'd have happened if Freight Links had collapsed financially?

Still, Sabana shares continued to slide from $1.05 to the 80s for aro' 1 year. It took ~ 2 years before it recovered above IPO price.

So, the key is perhaps, a financially stronger sponsor (eg. Temasek linked or Blue Chip linked like F&N, CDL) gives better confidence of stability and ability to survive a crisis. Whether real or perceived (since the REIT is supposed to be a separate entity), the market voting machine will still dominate and in this case, perhaps last longer than many of us can remain patient / solvent (if geared)... haha..

Soilbuild looks financially stronger than Freight Links, at least the owner anyway, who must have gotten very rich from all the IPOs.... Still, the credentials and pedigree is not as established and presents uncertainty... That means opportunity... if you think it's worth the risk?

Sometime I wonder if the biggest uniholders are more important than sponsor. For sabana, if they go for rights, the sposonor and their bosses account for only 10-15% iirc of the uniholders. I remembered HSBC nominee holding 19%, dun know if its the Kua family and associates?

For SPH, they will have to call 70% if there is a rights call, so I guess when they start selling, it's high time to get out of SpH REIT.

Also, the trustee hold the properties, nôt the sponsor, and manager can get voted out. So I guess even if freight links get into troubles, the most pain would be 15% stake hold. Not sure how much of macauthorcook limited stake of MI, will find out tonight. Not sure how the trustee deed will be affected when manager is changed thou, anyone knows?

[KopiKat]

CCT/CMT has Capitaland backing, and I don't see how it fared any better than MI-REIT, Allco or MMP. In the same way, I don't see Citi group had done any better than Lehman Brothers, though Citi group was bailed out by the US government and Lehman Brothers was bankrupted. A bad managed REIT is just a bad managed REIT. It really does not matter that much whether it got big companies backing or not. A well-managed REIT will do well no matter got strong backing or not.

Correct me if I am wrong, CCT/CMT are among the worst-performed REITs after the financial crisis. CCT has to divest its properties to save itself further. CMT does not take any advantages in the difficult times to acquire good income generating assets, either. To me, they fail badly even with strong backing.

Sponsors might matter if the REIT intends to do badly. Then no one should try to invest into it.

You're diverging from my point. I fully agree with you that a badly managed REIT is a badly managed REIT, regardless of the sponsor.

My point is a financially weak sponsor is a negative, as evidenced in the '08 crisis, where the worst case happened like the Aussies ones - MacAurthurCook & Allco. Go compare the 1-year performance at end-08 (crisis) and end-09 (recovery) to see for yourself. Both Allco (even after F&N took over and became FCOT) & MI-REIT remained at the bottom (only Saizen was below them in '08).

It took a few more years for the new mgmt to clean up and yes, your point may be right that being better managed, they'd performed better than the ones with strong sponsors. But, note that, in the case of Allco, it's also now one with a financially strong sponsor (F&N).

[freedom]

You're diverging from my point. I fully agree with you that a badly managed REIT is a badly managed REIT, regardless of the sponsor.

My point is a financially weak sponsor is a negative, as evidenced in the '08 crisis, where the worst case happened like the Aussies ones - MacAurthurCook & Allco. Go compare the 1-year performance at end-08 (crisis) and end-09 (recovery) to see for yourself. Both Allco (even after F&N took over and became FCOT) & MI-REIT remained at the bottom (only Saizen was below them in '08).

It took a few more years for the new mgmt to clean up and yes, your point may be right that being better managed, they'd performed better than the ones with strong sponsors. But, note that, in the case of Allco, it's also now one with a financially strong sponsor (F&N).

my original post was at the current environment. maybe I was not making myself clear. I did not quote the post. Sorry if there is any misunderstanding.

Sure, sponsor matters for survival. But at current environment or at time when Sabana was listed, a weak sponsor was quoted as the reason, I have to wonder.

[KopiKat]

Sometime I wonder if the biggest uniholders are more important than sponsor. For sabana, if they go for rights, the sposonor and their bosses account for only 10-15% iirc of the uniholders. I remembered HSBC nominee holding 19%, dun know if its the Kua family and associates?

For better chances of prices not falling below IPO price during 1st days of listing, the lower the free float, the better. Better still if sponsor retains the bigger % for longer term price stability.

For Sabana, the total Kua family direct + deemed is max. 10%+ since IPO. Started with only ~6% during IPO.

For SPH, they will have to call 70% if there is a rights call, so I guess when they start selling, it's high time to get out of SpH REIT.

I'm more inclined to think there's a very high chance that SPH will give out SPH REIT units as Dividends-in-specie to their shareholders, something like what KepCorp did with their KepREIT units (started with 71%+, at peak holding 77%+ after a few rights issues, now 46%+)

Also, the trustee hold the properties, nôt the sponsor, and manager can get voted out. So I guess even if freight links get into troubles, the most pain would be 15% stake hold. Not sure how much of macauthorcook limited stake of MI, will find out tonight. Not sure how the trustee deed will be affected when manager is changed thou, anyone knows?

IIRC, there were complaints that it's not easy to vote out them out. For eg., some disincentive strategy involves having the REIT borrowings tied to the condition that they continue to stay as mgr.

If my records are correct plus I interprete correctly (recorded too long ago), MacArthurCook started with 5% and progressively increased to 16%+ (Fees + Open mkt purchase). Some cornerstones were Lion Capital (5.6%), UBS (11%+), Indus (5.75%), USS (5.76%)

[Greenrookie]

Sometime I wonder if the biggest uniholders are more important than sponsor. For sabana, if they go for rights, the sposonor and their bosses account for only 10-15% iirc of the uniholders. I remembered HSBC nominee holding 19%, dun know if its the Kua family and associates?

For better chances of prices not falling below IPO price during 1st days of listing, the lower the free float, the better. Better still if sponsor retains the bigger % for longer term price stability.

For Sabana, the total Kua family direct + deemed is max. 10%+ since IPO. Started with only ~6% during IPO.

For SPH, they will have to call 70% if there is a rights call, so I guess when they start selling, it's high time to get out of SpH REIT.

I'm more inclined to think there's a very high chance that SPH will give out SPH REIT units as Dividends-in-specie to their shareholders, something like what KepCorp did with their KepREIT units (started with 71%+, at peak holding 77%+ after a few rights issues, now 46%+)

Also, the trustee hold the properties, nôt the sponsor, and manager can get voted out. So I guess even if freight links get into troubles, the most pain would be 15% stake hold. Not sure how much of macauthorcook limited stake of MI, will find out tonight. Not sure how the trustee deed will be affected when manager is changed thou, anyone knows?

IIRC, there were complaints that it's not easy to vote out them out. For eg., some disincentive strategy involves having the REIT borrowings tied to the condition that they continue to stay as mgr.

If my records are correct plus I interprete correctly (recorded too long ago), MacArthurCook started with 5% and progressively increased to 16%+ (Fees + Open mkt purchase). Some cornerstones were Lion Capital (5.6%), UBS (11%+), Indus (5.75%), USS (5.76%)

16% seem like a relative small stake.. That's means my hypothesis is wrong .. Weird all the corner investors allow themselves to be screw by aim financial, 2 big placements by shares to themselves follow by rights ...wonder how to manage to convince tem to vote favorable during EGM

[KopiKat]

16% seem like a relative small stake.. That's means my hypothesis is wrong .. Weird all the corner investors allow themselves to be screw by aim financial, 2 big placements by shares to themselves follow by rights ...wonder how to manage to convince tem to vote favorable during EGM

Old news from 2009,

MI-REIT gets its way after sound and fury
25/11/2009

Like watching a dramatic soap opera unfold back then...

[Greenrookie]

16% seem like a relative small stake.. That's means my hypothesis is wrong .. Weird all the corner investors allow themselves to be screw by aim financial, 2 big placements by shares to themselves follow by rights ...wonder how to manage to convince tem to vote favorable during EGM

Old news from 2009,

MI-REIT gets its way after sound and fury
25/11/2009

Like watching a dramatic soap opera unfold back then...

Thanks, I wonder if they play a game of blink with the banks up to the last minute, will the bank renew financing? Since the assets are still worth more than the debt, just that shareholders get nothing...

[KopiKat]

Refocus back.... Have to try to understand SBREIT better to decide whether to hold for longer term...

From LinkedIn,

Shane Hagan's Experience

CEO
Soilbuild Trust Management
Public Company; 51-200 employees; Construction industry
November 2012 – Present (10 months)

CFO
Mapletree Commercial Trust
Privately Held; 1001-5000 employees; Real Estate industry
June 2010 – November 2012 (2 years 6 months) Singapore

CFO
Lippo Mapletree Indonesia Retail Trust
May 2009 – June 2010 (1 year 2 months)

CFO
APL Japan Trust
August 2007 – April 2009 (1 year 9 months)

CFO
Ascendas Real Estate Trust
Privately Held; 501-1000 employees; Real Estate industry
July 2003 – July 2007 (4 years 1 month) Singapore

---

Role of Honour from Ballot Results,

[Image: 20j0oyd.jpg]

[KopiKat]

Mr Lim got 20Mil units @ 73ct from open market today.... Now, I wonder if that Bloomberg article is correct after all ...
No wonder the Buy Q @ 73ct had so many today... I thought it was the Stabilising Manager using up their last "bullets"...

http://infopub.sgx.com/FileOpen/FORM1_Li...eID=252991

So, back to my original question. Does he need to make a Mandatory G.O. if he crosses 30%? Latest = 22.481% + another possible 7% if Stabilising Manager returns that to him after buying from Open Market... Interesting!