The plot thickens at Sabana Shariah-compliant Reit, with Ms Ng Shin Ein, a non-executive director of the trust manager, quitting amid a minority-investor revolt.
Ms Ng, who has had a board seat since the Reit's listing in November 2010, raised concerns in her resignation letter about "certain internal dynamics within the company".
She said she resigned on Jan 16, but stayed on "out of a sense of duty" after unitholders mounted a campaign to oust the Reit manager.
Ms Ng wrote in the letter that was submitted to Singapore Exchange (SGX) late on Monday night: "I wanted to ensure that a basic framework and process for the strategic review was established.
"I continue to believe that it is essential that the fundamental issues relating to a) a pipeline of good properties, b) financing costs and c) management are resolved.
"While the basic framework and process are now in place, my reason for the earlier resignation remains and I am not confident that I can contribute meaningfully."
Ms Ng declined to comment beyond what was stated in her letter.
Sabana Real Estate Investment Management, which manages Sabana Reit, drew flak after launching a heavily discounted rights issue in December that it said would fund the purchase of three non-yield accretive properties. This includes $23 million to acquire an industrial building in Changi from its sponsor Vibrant Group. Some unitholders argued the price is too high, even after taking into account a 10-year lease- back to Vibrant. Vibrant paid just $10.9 million for the building in 2011.
To assuage investors' concerns, the Reit is embarking on a strategic review, which includes seeking out new partners that can feed it a pipeline of quality assets to improve its property portfolio and borrowing ability. Generally, Reit managers depend on their sponsors for a pipeline of income-generating properties, and Reits with good properties naturally have lower financing costs. But because the sponsor is also usually a majority shareholder in the Reit, purchases may not always be in the best interest of minority unitholders, critics have warned before.
Asked by SGX last week if the Changi building could be easily disposed of for $23 million in the open market, Sabana Reit's manager said it would depend on several factors.
Meanwhile, Sabana's agitators remain sceptical of the usefulness of the strategic review.
Mr Jerry Low, a stockbroker who last month ignited a process to fire the Reit manager, noted that independent directors Steven Lim Kok Hoong and Yong Kok Hoon form the core of the review committee.
"If both of them cannot resolve the 'certain internal dynamics within the company', how are we, the unitholders, able to trust them to resolve our problem?" he asked, adding, "Ms Ng's parting words are making us very nervous."