Sabana Reit 'in discussions' with ESR-Reit as part of strategic review

SINGAPORE - The manager of Sabana Shariah-compliant Reit on Monday (Aug 7) night confirmed that it is in talks with the manager of ESR-Reit (formerly known as Cambridge Industrial Trust) to explore options related to its strategic review.

Earlier on Monday, units of Sabana Reit jumped 4.5 cents or 10.11 per cent to 49 cents with 6.5 million units changing hands after Reuters reported that Warburg Pincus-backed e-Shang Redwood (ESR) was in talks to buy Sabana Reit, citing sources.

Sabana called for a trading halt at 11.05am pending an announcement in response to the news.

In a statement to the Singapore Exchange later, it confirmed discussions were ongoing.

"At this point, Sabana Reit has not entered into any definitive legally binding agreement with ESR-Reit. Accordingly, there can be no assurance that any transaction or agreements will eventually materialise pursuant to these discussions."

In March, Warburg Pincus raised its stake in Sabana Reit to 5 per cent through open market purchases after Sabana said in February that it would undertake a strategic review to soothe unit holders' concerns over falling distributions by seeking out new partners and possibly a new sponsor

In May, Mr Kevin Xayaraj said he would step down as chief executive of Sabana Real Estate Investment Management on Dec 31, "to address unit holders' feedback and to pave a way for change and new leadership".

On July 25, Sabana announced a second-quarter distribution per unit of 81 Singapore cents, down 24.3 per cent from the same period a year earlier.