Sabana REIT's property near Serangoon, New Tech Park. (Photo: REITsWeek)

Sabana REIT is currently preparing a circular for an extraordinary general meeting (EGM), and will issue the document once it is cleared by the Singapore Exchange (SGX), its manager disclosed to the bourse late on 17 February.

The circular is being prepared in respect of a requisition letter received by the Shari'ah-compliant REIT on the 6th of the same month.

The requisition letter, which has been signed by 66 unitholders representing approximately 0.6% of the total issued in the REIT, calls for the convening of an EGM, during which a number of resolutions will be tabled.

A resolution to remove the industrial REIT’s manager is expected to be tabled at the EGM.

In its disclosure, Sabana REIT has also said that the SGD215 million (USD151 million) in property revaluation loss from FY2014 to FY2016 are due to the “oversupply of industrial properties amidst waning demand and the changes in regulatory policies”.

“The trend of revaluation loss is in line with the performance of the other industrial REITs which are similarly Singapore-focused and of similar size, where overall valuations for their industrial properties in Singapore have also been trending downwards since FY 2014”, said the REIT.

In the same disclosure, Sabana REIT also responded to queries from the SGX on the valuation of 47 Changi South, asking if this valuation is normal.

Sabana REIT is acquiring the property from its sponsor Vibrant Group for SGD23 million, but a number of unitholders have pointed out that the property was originally purchased by the sponsor for SGD10.9 million - less than half its current valuation, in March 2011.

“As announced previously on 7 February 2017, the sponsor had purchased the property for its own use, and therefore the book value of SGD10.9 million refers to the original cost of acquisition by the sponsor less the accumulated depreciation”, said Sabana REIT.

“As such, the book value is irrelevant, and not the appropriate basis for comparison in the context of the current acquisition by Sabana REIT where the property valuation is arrived at based on the rental that the property will be generating over the next 10 years”, it added.

Units of Sabana REIT are currently listed on the SGX at SGD0.445.

Read: Investors reiterate calls to remove Sabana REIT's manager despite assurances of review

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.