SINGAPORE (Apr 16): In a Singapore Exchange filing, e-Shang Redwood (ESR), a pan-Asia logistics real estate developer, which is the sponsor and major shareholder of ESR-REIT, announced that it held a 7.05% stake in Sabana Shariah Compliant Industrial REIT as at April 6. Sabana REIT’s net asset value as at Dec 31 was 53 cents and the real estate investment trust is one of a handful of REITs trading below their NAV. Asked for his view on ESR’s increasing its stake, Donald Han, CEO of Sabana REIT’s manager, says: “It’s good value to buy at 42 cents when the NAV is [53] cents.”

Although the shareholding of the manager has not altered during the past 12 months, the management has changed. Han, a veteran property consultant, became CEO of Sabana REIT’s manager on Jan 25. In a recent interview, he outlined what he calls his “Refocused, Recali brated Strategy”.

Han’s first task was to engage property agents. He believes this is the way to get occupancy up to at least the industry average. Following on from occupancy ramp-up, he hopes to increase the portfolio’s rental income. An eventual uplift on net property income and distributions per unit should follow, he reasons. In the meantime, two — perhaps three — buildings in the portfolio may undergo asset enhancement initiatives (AEIs). At some point, Han hopes to get the REIT’s general mandate back. Finally, after he has accomplished all this, he will think about acquisitions.

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