A small group of investors in Sabana Shariah-compliant Reit is so angry over its lacklustre performance that they are campaigning to have the trust's manager sacked.
The move is the first concerted push by retail investors here to have a Reit manager fired.
They want to kick out Sabana Real Estate Investment Management, which collects multimillion-dollar fees every year for performance, acquisitions and divestments, and replace it with an in-house team better aligned with unit holders.
One disgruntled investor is Mr Koh Yee Kan, who bought into the Reit at an average price of about $1, only to see the price fall steeply, closing at 37 cents yesterday.
He told The Straits Times: "In the last few years, the manager has purchased a number of properties at a high price that don't really add a lot of value to the company, and management is able to bypass unit holders most of the time."
Investors were also vexed by the Reit's decision last month to buy three properties in Eunos and Changi for $77.5 million and fund the deals by a dilutive rights issue.
The Reit manager said increasing the number of units would be good for trading liquidity but the price fell off a cliff after the rights issue was announced on Dec 20.
That was when investors swung into action, coalescing on investment forums and a Telegram chat group named Sabana Reit Activists.
Unit holders can vote to remove the Reit manager at a meeting convened by the trustee or manager if at least 50 unit holders or unit holders representing no less than 10 per cent of total units request a meeting.
Mr Jerry Low, a semi-retired stockbroker, said 62 people willing to request such a meeting have come forward. They plan to deliver a letter to the manager next month.
If the trustee and manager do not thwart the request to meet, then a simple majority of those present is needed to vote for change.
But investors face an uphill task.
Phillip Capital analyst Richard Leow said: "All bets are off, if a general meeting does not materialise. This is the key uncertainty, as there has not been any recent precedent for a call to remove a manager."
Then there is the question of retail investor fragmentation. The sponsor, manager and related entities held 12.14 per cent of the Reit as at Dec 23, while Chinese property tycoon Tong Jinquan controlled 8.35 per cent. The rest of the shareholding is fragmented.
Still, Mr Low thinks it is worth a shot: "This is the only action we can take... The whole structure is wrong. Distribution per unit has been falling while total fees paid to the external manager were $8.5 million in 2013, $9.7 million in 2014 and $9.3 million in 2015."
The rumblings come more than two years after the Monetary Authority of Singapore threw out rule changes it had proposed that would have levelled the balance of power between Reit managers and investors.
In June, Croesus Retail Trust was the first Reit here to reap savings by bringing its manager in-house, acquiring it for $50 million.
A spokesman for Sabana Real Estate Investment Management declined to comment.
Correction note: This story has been edited for clarity.