Sabana should lead smaller Reits with underperforming unit prices to look for an exit

SOME unitholders of Sabana Industrial Real Estate Investment Trust (Sabana Reit) who voted to remove Sabana Real Estate Investment Management (SREIM) as the trust’s manager and kick off the process of internalising the Reit’s manager on Aug 7, 2023, may be overcome with remorse.

The path to internalising management whereby the Reit’s trustee owns the manager instead of outsourcing management to an external party appears to be messy and costly.

Sabana Reit posted year-on-year (yoy) growth in gross revenue and net property income for H2 2023. However, the board of directors of the trust’s manager declared a distribution per unit (DPU) for the second half which fell 21 per cent yoy.