Sabana Shari'ah REIT

[tanjm]

Very good question.  We are for internalization but definitely not with this present group of people.  The cost benefits of internalization is immediate.  And many correctly pointed out the difficulty of getting someone with ten years experience to head it bearing in mind, 10 years ago, there were only 4 REITs.  And the first REIT was listed only 14 years ago.  

If we are able to remove the manager but the internalization is not approved (no qualified CEO), we will rather push for winding up than to have the present team continue running it (Code dictates there must be a manager at all times).

From the wordings of Sabana's last announcement, it appears that they are going to propose internalization of their present team (like Croesus).  We think telling a wolf to eat less chicken in a coop is never a long term solution.

Please consider joining the facebook with  questions like this that really address the issue.

https://www.facebook.com/groups/15863995...0/?qsefr=1

http://sabanareit.blogspot.sg/

I don't own any units of Sabana, so I'm mainly curious. Let me rephrase, and add on some points to ponder.

You say that the manager currently takes too much fees. Have you calculated how much you will save in terms of cents per unit share? How bad are the fees compared with another REIT? If you internalize the manager, how will you incentivize them to do better?

Or do you think the current managers are simply doing a bad job? why would another prospective manager want to take over - especially if you reduce fees or demand that the management is internalized?

Have you considered that winding up the REIT is not easy and can take some time without getting bad prices for the properties? How will you ensure that the manager appointed to oversee this unwind will be incentivized to do a good job?

If you own 100,000 units of Sabana, and you can realize only an additional 20 cents per share from this difficult action which may not succeed, is the rational cost benefit worth it, without considering your sunk cost?

Ask yourself: If the share price of Sabana is way below fair price, why has it not received a general buyout or merger offer from an external entity? 

As an general observation (caveat: i did not check the current regulations) : the regulator may want to consider explicitly allowing shareholders vote to retain a manager every X years (possibly X=1) in an AGM. Also to give powers to the trustee to entertain applications by other property managers to bid for getting to manage the REIT.