CEO of Sabana Reit manager quits; Changi South deal scrapped

KEVIN Xayaraj, the embattled chief executive officer and executive director of Sabana Shari'ah Compliant Industrial Real Estate Investment Trust's manager which had drawn unitholders' revolt has tendered his resignation.

In an announcement to the Singapore Exchange, Sabana Reit's manager, Sabana Real Estate Investment Management, said the resignation of Mr Xayaraj who has been with the manager since 2010, has been accepted by the board. His last day will be end December 2017 or earlier as may be agreed between the board and Mr Xayaraj to ensure a proper handover and smooth transition for his successor, it added.

It was also announced that following the feedback from unitholders over the reit's proposed acquisition of 47 Changi South Avenue, the deal has been terminated.

"While the board maintains its view that the proposed acquisition would have been beneficial to the long-term interests of Sabana Reit and unitholders", in light of the continuing feedback from unitholders, Sabana Reit and Freight Links Properties Pte Ltd - a subsidiary of the Reit's sponsor, Vibrant Group - have agreed to terminate the put and call option agreement entered into for the proposed acquisition.

"We have heard their (unitholders) feedback. Business as usual is not an option and we have taken steps to address their concerns," said the board of the Reit manager in a separate statement issued on Tuesday.

The surprise decisions by the board followed the release of a weak set of results by the Reit for the three months to March 2017 period.

For the first quarter, Sabana Reit posted a 24.1 per cent drop in distribution per unit (DPU) to 0.88 Singapore cents from 1.16 Singapore cents a year ago.

As the Reit manager did not obtain the general mandate from unitholders at an annual general meeting held on April 28 to issue units as either full or partial payment of manager's fees, the manager has elected to waive 75 per cent of its fees to be paid in cash to cushion the dilutive effect on the DPU for the quarter.

Gross revenue fell nearly 7 per cent to S$22.0 million while net property income slipped 12.1 per cent to S$13.3 million.