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SAVE SABANA REIT (SGX: M1GU)

 

Urgent action is needed to save Sabana REIT unitholders' interests 

Quarz Capital and Black Crane Capital intend to reject proposed merger of Sabana and ESR REITs at current terms

This website and the information contained herein (collectively referred to as "the Website") are being made available to all unitholders of Sabana REIT. Quarz Capital  together with Black Crane Capital ("Quarz", "Black Crane") are the investment managers of private funds (the “Quarz Funds”, "Black Crane Funds") that own units in Sabana REIT. Quarz/Black Crane have created this Website to enable visitors to carefully monitor how the board and management of Sabana REIT address our Proposals, listen to unitholders’ views and endeavours to increase the value of the Sabana REIT units in the best interest of all unitholders (please read our disclaimer and data privacy rules carefully).

  • The Manager of Sabana REIT has in our opinion increasingly lost value for Unitholders through its decisions

  • We believe the proposed merger between ESR REIT and Sabana REIT potentially destroys tremendous value for Sabana REIT Unitholders

  • Quarz Capital and Black Crane Capital are therefore opposing the proposed deal at the current terms

  • We urge all Unitholders to carefully review the merger terms, our independent analysis and do their own research on the proposals

  • We stand ready to VOTE AGAINST the proposed deal and we are asking for an improved offer from ESR-REIT

A MERGER BELOW NAV IS HIGHLY UNUSUAL

"In the 18-year history of the Singapore REIT market with more than 8 takeovers, there has never been a single takeover of a REIT at such a substantial discount to book value!"

UNPRECEDENTED TAKEOVER DISCOUNT -VS- NORMAL PREMIA

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  • ESR Cayman paid S$ 0.48 cents in CASH for 1 Sabana REIT Unit exactly 1 year ago

  • Now they offer unit holders S$ 0.376 cents with NO CASH, in ESR-REIT units at a steep discount to Sabana NAV

  • Sabana NAV was swiftly reduced from 0.57 to 0.51 (-~10%) in 6months by the REIT Manager?

  • No mention of the before lauded new retail component?

  • Premature assumption of the termination of master lease in valuation?

  • Multiple levers to reach book value are identifiable and thus Sabana REIT should be taken over at Book Value.

UNITHOLDERS' INVESTMENTS IN SABANA REIT ARE POTENTIALLY WORTH LESS DUE TO ITS POOR MANAGEMENT

"The Manager of Sabana REIT, Sabana Real Estate Investment Management Pte. Ltd (the "Manager"), which is more than 60% owned by ESR Cayman has in our view not timely executed on unitholders' proposals to increase unitholder value. This must be resolved!"

POTENTIAL CONFLICT OF INTEREST ARISING FROM OWNERSHIP STRUCTURE?

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  • Obvious and well documented potential conflicts of interest exist?

  • One owner controlling 2 REIT Managers in Singapore with the same mandate.

  • A transparent and open bidding for Sabana or Sabana's Assets at equal or higher than book value should be obvious for any potentially unconflicted REIT Manager with fiduciary duties to unitholders?

  • What is the recommendation of independent directors of Sabana REIT?

  • On what basis do ID's recommend Sabana REIT unitholders to sell below Book Value?

WHAT HAS GONE WRONG WITH SABANA REIT?

"The potentially conflicted REIT Manager has chosen to recommend a suboptimal offer instead of executing and focusing on readily available levers to increase DPU. Conveniently the merger will erase/cover the underperformance instead of uncovering and addressing/solving key issues at Sabana!"

LOW OCCUPANCY RATE OF SABANA REIT -VS- OTHER SINGAPORE REITS

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  • Occupancy Rate of the portfolio managed by Sabana REIT Manager is substantially lower than listed peers and the industry

  • There is substantial potential for increased occupancy rate and rental income

  • Manager has not undertaken any strategic transactions since early 2019 despite one of the lowest gearing ratio among SGX listed REITs

  • Unitholders have rejected the poor performance of the REIT manager in the past

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  • It appears that occupancy rate has dramatically declined since ESR became the controlling shareholder of the REIT manager

  • Manager has conveniently blamed it on the expiry of the master leases

  • however peers with similar master lease expires have successfully renewed and found new leasees resulting in continuing high occupancy rate

  • Offer well below NAV as a result of underperformance?

  • Will Sabana REIT unitholders enable a merger well below NAV?

CONTACT US / SUBSCRIBE TO UPDATES

WE ARE BUILDING A COMMUNITY OF UNITHOLDERS TO EXCHANGE THOUGHTS AND TO COLLECTIVELY EVALUATE THE OFFER AND ALTERNATIVE SOLUTIONS TO CREATE UNITHOLDER VALUE

PLEASE SUBSCRIBE AND GET IN TOUCH