(08-08-2023, 12:19 PM)CY09 Wrote: As said, Sabana Ex-managers were unlikely acting in good faith for Sabana Unitholders. The head (who is now jobless) should consider joining politics given his calibre and track recordOverall this shows that is a dire need for all REIT managers to act in good faith when evaluating the purchase of assets especially when the seller is of the same company. Manulife REIT faced the same problem where during the heydays its property were sold at high value to Manulife REIT
The REIT managers of Keppel, Capitaland, City Development, UOB, OUE, Mapletree will be under close scrutiny given the track record of their property development's division propensity to offload assets into the REITs it is managing.
hi CY09,
IIRC, the Trustee will probably direct the existing manager to manage it during the interim period. This interim period can be ~2years. So technically, the head will not be jobless now. After the interim period is over, I reckon the parent ESR may have a job for him/her.
Nonetheless, you bought up a good point that Sponsors need to "watch out" now. Moving forward, the balancing act between extraction of value for themselves VS their captive AUM needs to be more delicate and careful. I remember 75% is needed to remove the manager for Trust structure, so there isn't great danger for Trust type of AUM.
Looking at the EGM results:
397mil for removal
294mil against removal
Top 3 shareholders for Sabana:
ESR 214mil
Volare 176mil
Quarz 154mil
Mathematically, it is not possible for ESR and Volare to have voted together (Top1 and Top2). Rather it is probably Top2 and Top3 voting together (Volare and Quarz). As for minorities, it was roughly equally split with ~53% going to ESR and 47% to Quarz.
So this brings forth another lesson for AUM operators - you probably want to reduce the "dividend in specie" of REIT shares, and maintain a sizeable ownership that is at least comparable/higher to the next few substantial shareholders combined!
I will be watching closely on the success of Sabana REIT in their manager internalization journey, so as to continue to assess the stickiness of AUM type of business! (Eg. in Capitaland Investment's slides, you will see them classify their listed AUM as "perpetual"!)