The embattled manager of Sabana REIT announced late on 24 February that it has appointed Morgan Stanley Asia as a financial adviser in its “strategic review” exercise, raising questions over the REIT’s future direction, and ultimate intentions.
This is especially so given that the Shari'ah-compliant REIT had earlier indicated its willingness to meet with disgruntled unitholders in an extraordinary general meeting (EGM), during which proposals to remove the manager are expected to be tabled.
The strategic review exercise was first announced in mid-February 2017, and has been undertaken amid calls for the industrial REIT’s manager to step down.
“Morgan Stanley will assist [Sabana REIT’s] strategic review committee in the strategic review exercise, and report to the strategic review committee directly”, said the manager, adding that various options are currently being considered, including from “potential strategic partners”.
Sabana REIT has however not given further details on who the potential partners may be, but it highlighted that any person who is interested in becoming a strategic partner could approach Morgan Stanley to indicate the intention.
Sabana REIT received a requisition letter signed by 66 unitholders for an EGM earlier in the month.
Among proposals that have been forwarded by unitholders include one to remove Sabana REIT’s manager, citing poor performance and questionable investment decisions.
These include the decision to acquire 47 Changi South from the REIT’s sponsor for SGD23 million (USD16.3 million), when it was originally purchased for SGD10.9 million.
In addition to reporting falling DPU for consecutive quarters, the REIT’s unit prices have also fallen by as much as 67% since 2013 when it was trading on the Singapore Exchange above well above SGD1.30.
Units of Sabana REIT are currently listed on the Singapore Exchange at SGD0.435.