There have been concerns of a rising interest rate environment. This will inevitably reduces the distribution of REITs. However, there are some REITs that were sold down on other reasons such as poor visibility moving ahead(Sabana), and changing taxes landscape(LippoMall Reit).
I will discuss this below.
Sabana REIT:
The NAV of Sabana has decreased significantly from $0.822 ( pre rights issue in 2013, NAV was $1.06) ) to $0.53 ( in Sep 2018). The share price dropped from $1.05( adjusted for rights) to $0.415 on 24th Sep 2018. Nav has decreased 35% and share price has decreased about 60%.
Is the drop justified ?
1) The distribution for FY2013 was $0.0938 and $0.066( adjusted for rights ).
The distribution for FY2017 was $0.033, a 50% drop as compared to FY2013.
Based on this, i think the drop was a bit overdone.
2) New management
With the strategic review being concluded, a new management team is formed up.
Donald Han with vast experience in the industry was appointed as the new CEO.
Tan Cheong Hin has joined also the board as a new independent director. Mr Tan was formerly director (Euro) of Mapletree Investments.
With a new team, i am confident they can steer Sabana into better days.
3) Clear Plans ahead
Step One: Increase occupancyStep Two: Retain tenants
Step Three: Asset Enhanced Initiatives
Step Four: Get back the general mandate
More information:
https://www.theedgesingapore.com/new-broom-sweeps-clean-sabana-reit%E2%80%99s-unitholders
I will discuss this below.
Sabana REIT:
The NAV of Sabana has decreased significantly from $0.822 ( pre rights issue in 2013, NAV was $1.06) ) to $0.53 ( in Sep 2018). The share price dropped from $1.05( adjusted for rights) to $0.415 on 24th Sep 2018. Nav has decreased 35% and share price has decreased about 60%.
Is the drop justified ?
1) The distribution for FY2013 was $0.0938 and $0.066( adjusted for rights ).
The distribution for FY2017 was $0.033, a 50% drop as compared to FY2013.
Based on this, i think the drop was a bit overdone.
2) New management
With the strategic review being concluded, a new management team is formed up.
Donald Han with vast experience in the industry was appointed as the new CEO.
Tan Cheong Hin has joined also the board as a new independent director. Mr Tan was formerly director (Euro) of Mapletree Investments.
With a new team, i am confident they can steer Sabana into better days.
3) Clear Plans ahead
Step One: Increase occupancyStep Two: Retain tenants
Step Three: Asset Enhanced Initiatives
Step Four: Get back the general mandate
More information:
https://www.theedgesingapore.com/new-broom-sweeps-clean-sabana-reit%E2%80%99s-unitholders
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