Singapore’s first Shari’ah Compliant REIT has been awarded the “Most Outstanding Islamic Real Estate Product” at the 10th Kuala Lumpur Islamic Finance Forum. The accolade was awarded to Sabana REIT in recognition of the successful issuance of an S$80 million convertible sukuk, the first in the world to be convertible into units in a real estate investment trust.

Sabana REIT holds a portfolio of industrial properties across Singapore

Receiving the award at Hotel Istana Kuala Lumpur in Malaysia, co‐founder, Chief Strategy Officer and Head of Investor Relations of the manager for Sabana REIT, Mr Bobby Tay said the award signified Sabana REIT’s continued strength at innovation in Islamic finance.

Mr Bobby Tay said, “Sabana REIT has once again created a first in the Islamic finance industry. The success of Sabana REIT’s convertible sukuk shows that there is appetite for well‐structured Islamic finance products and that Islamic finance can be innovative to meet various financing needs.”

The Convertible Sukuk was issued in September 2012 to finance Sabana REIT’s acquisition of a property located at 23 Serangoon North Avenue 5 in Singapore.

Unlike the typical Ijarah or Wakalabased sukuk structures where the assets generating the profits usually start off as assets owned by the obligor, Sabana REIT’s Convertible sukuk combines the concepts of Murabaha, Ijara and Wakala to acquire a real estate asset which formed part of the trust assets that generate profit for sukuk kholders.

Units of Sabana REIT closed slightly lower by about 0.46 per cent to end the day at S$1.08

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.