Sabana Shari'ah REIT

I divested all my Sabana too. With minor loss

time to be greedy when others are fearful?

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Divested all this morning , realized agit of gains . I will be back sabana

Prices seem to be holding up well at 1.04c.
But don't know what will happen once Ex-dividend.

If Sabana is offering the same yield as the bigger Industrial REITs, then what is the rational of investing in it now?

Sabana was ever attractive when it was offering yield in the zone of 9% while the other industrial REITs' yields stand around 5.5-6.5%. During that period, it was also much lower geared than now.

Hope to see that they can do a turnaround, but doubt will be anywhere in the horizon. Their announcement and presentations do not present any "end-of-tunnel" feel too.

The last done price for Sabana today is $1.04.

With the dividend of 1.88 cts per quarter, the price of Sabana will need to be adjusted to at least 90cts (13.46% drop) to get a 8% yields.

If the market expected 9% yield, the price will then need to drop to 83cts (20% drop from current price)?

Just wonder how long can the share price hold at this level ?

(17-04-2014, 09:26 AM)gutman Wrote: Just divested all my holdings in Sabana, which I have held for 3+ years.

I would not have sold if it is just one quarter or two quarters of weak results. I do share Greenrookie's concern that this doesn't seem to be a one time weak financial numbers.

Rationale for Buying and Holding
The high yields of close to 9% over the last 2-3 years has been good despite the small capital gains. Gearing was low and occupancy was decent then.


Rationale for Selling
After attending the AGM last week, I told myself it is time to part with this company. Management does not appear confident and is looking at divesting some non-performing properties. The properties they held are gradually being converted from Master Tenanted to to Multi-tenanted.

Firstly, I am not sure how good a price they can fetch to divest the non- performing properties given the next 1-2 years' supply demand equation.

Secondly, future DPU will be affected if they divest, although there could be a one time gain if they distribute capital back.

Thirdly, multi-tenanted means they would take on more risk and higher expenditure. Given the increase in gearing and likely increase in interest rates, I am not sure how well management can cope.

I was thinking of holding until the result and distribution announcement.

It was a bad decision.

Nevertheless, the returns over the last few years have been decent and I should be grateful to the management. Thus, I do sincerely hope they can improve things moving forward. Until then, I, too, have to say goodbye.

Divested my stake this morning, will come back for a second look after 2015 when more buildings are converted to Multi-tenanted and when management can proved themselves that they are able to manage the new structure.

I have been a shareholder since Dec 2011 and managed to eked out a small return. It's time to say goodbye and put my money to better use.

I actually think its possible we may be quite near the bottom for Sabana. The market had already priced in most of what was announced.

There was a 7+ million increase in costs, of which 2 million was due to (one time) refinancing costs. 6 of the properties are still only at 76% occupancy, and 22 properties at 90%. If you strip the 2 million out alone, that means an adjusted dividend of about 2.19 cents, which is a 8.47% yield at current prices.

This was based on a cursory glance at the financials. Let me know if you think I'm mistaken.