SINGAPORE (Nov 25): The manager of Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (Sabana REIT) says talks with the manager of ESR-REIT involving the sale of its assets or units, have ceased.

See: Warburg Pincus-backed ESR in talks to buy Singapore's Sabana REIT: sources

Instead, Sabana Real Estate Investment Management (SREIM) will now identify suitable assets for disposal.

“Depending on Sabana REIT’s existing priorities, the proceeds of such disposition may, among others, be deployed to repay loans, used for working capital purposes and/or for distribution to unitholders,” says SREIM in a Friday night filing.

As announced on Oct 23 in Sabana REIT’s 3Q17 results, Sabana REIT’s property at 6 Woodlands Loop has been reclassified to be an investment property held for divestment.

Meanwhile, SREIM says its nominating and remuneration committee has intensified the search for a new CEO after Kevin Xayaraj tendered his resignation effective from Dec 31, 2017.

See: Sabana REIT manager CEO Xayaraj steps down; acquisition of 47 Changi South Ave 2 aborted

In a separate Friday night filing, ESR Funds Management also confirmed it is no longer exploring transaction options with Sabana REIT after being approached by the latter. The talks were announced on Aug 7.

In its strategic review, Morgan Stanley Asia (Singapore), on SREIM’s behalf, had reached out to a broad range of potential counterparties including REITs, developers, private equity funds, asset managers with the objective to solicit offers involving the assets or the units of Sabana REIT or shares of the manager.

Trouble for Sabana REIT started when unitholders in an April AGM voted against a mandate giving SREIM the power to issue new units by way of rights, bonus or placements, or make offers or undertake agreements or options that would require units to be issued including warrants, debentures or convertible instruments.

However, the unitholders also voted against a motion to remove the underperforming REIT manager at an EGM on the same day.

See also: Sabana REIT unitholders vote against general mandate as attempt to vote out manager fails

Units in Sabana REIT closed at 43 cents on Friday.