Why Former Sabana Director Chan Wai Kheong Is Making Things Hard For Sabana REIT Unitholders, And Not Proposing Constructive Motions for All to Benefit

Last Friday on 17 January 2025, there is another turn of event in the Sabana "saga". Former Sabana Director Chan Wai Kheong has rallied support of at least 10% (suspicion is supported by the Hong Kong company of "ESR Group") of shares owned to request for an EGM to do a price discovery process with view to achieve the sale of all or majority of Sabana Assets.

While I am not a unitholder of Sabana REIT, the proposal put forth by this former director of a REIT shows the director himself has very little knowledge of the happenings in the REIT industry or just trying to make things difficult for the new internal manager without the aim of monetising the assets as per what he claims which will benefit all unitholders in his letter.

Case History of Manulife US REIT- Instead of a Price Discovery Process, Requisite for a Dispostion Mandate Anchored on the Independent Valuers Valuation

Last year, Manulife US REIT voted for a Disposition Mandate, it was a straightforward process where the REIT manager is allowed to sell any property if it was at least 85% of the valued price calculated by the independent valuers. This was to allow for the quick monetisation of assets to protect unitholders' interest.

Therefore, what Chan Wai Kheong could have requested in order for Sabana Unitholders to  benefit are:

(i) Request for a disposition mandate, 

(ii) Set a timeline for the sales of properties, 

(iii) Mandate a TnC that each sale should not deviate no less than X%, e.g. 10% less than the Independent Valuers valuation of each Sabana's property.

A disposition mandate will result in a faster sales process because prospective buyers are anchored to a valuation report done by an independent Singapore valuer and this report is updated annually as per Singapore's law. It is much faster than a price discovery process put forth under Chan Wai Kheong's.

What Assumption Was Made

In my above thoughts, I had presumed the valuers of Savills and C&W of Singapore had done their valuation with independence and professionalism. Therefore Savills and C&Ws' year end report can be relied on as reference and is not fraudulent.

If Chan Wai Kheong is disputing this fact and hence is opting for a price discovery, he should come out and say in his professional view Savills and C&W of Singapore are committing flawed calculations in their reports and report this to the Singapore Institute of Surveyors and Valuers. This is something he as a former director of the REIT should know. Otherwise based on his past experience, he would be aware that the independent year end reports can be trusted, relied on and therefore proceed for a faster disposal process via a disposition mandate.

This will quickly help unitholders to realise the value of Sabana assets and protect their wealth. Alternatively as i have said in my second paragraph, he is just making things hard with no intent of helping unitholders and plans to add more roadblocks to lengthen the internatlisation process which has gone on for 1+ year. This internalisation process had been hit by roadblock one after another such as by a stubborn trustee of a Hong Kong Bank's (HSBC) subsidary who had to be overruled by the Singapore Court for a simple matter. 

All these have been resulting in undue loss in value for unitholders.