Singapore’s first and only Shari’ah Compliant REIT Sabana (Sabana REIT) (SGX:M1GU) has announced that it is proposing to carry out a private placement of 40,000,000 new units at an issue price of between S$1.00 and S$1.02. The private placement aims to raise gross proceeds of no less than S$40.0 million and will be offered to institutional and other investors.

Sabana REIT hold a portfolio of industrial properties across Singapore

The tentative issue price of between S$1.00 and S$1.02 per new unit represents a discount of between 7.8 per cent and 9.6 per cent respectively to the adjusted volume weighted average price of S$1.1066. Units of Sabana REIT are currently trading down about 3.56 per cent at S$1.09 on the Singapore Exchange.

Proceeds from the placement will primarily be used to fund the proposed acquisition of an industrial property located at 508 Chai Chee Lane, Singapore. The 11-year old property has been described by Sabana REIT as a strategically located close to MRT stations and a major expressway that runs across the island.

508 Chai Chee Lane also has a healthy balance land tenure of 46.5 years. This is relatively also longer when compared to Sabana REIT’s existing portfolio of approximately 38.8 years.

The acquisition for this property is expected to cost approximately S$39.2 million. Balance from the rest of the placement will go towards acquisition costs such as legal and accounting fees.

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.