Opinion & Features

Quarz’s internalisation proposal is an opportunity for Sabana Reit’s manager to show independence

Whether unitholders choose to set up a new internal manager or acquire its existing manager, they will have to shoulder some cost and risk

Ben Paul

Published Mon, Jul 3, 2023 · 05:00 AM

Mark to Market

THE manager of Sabana Industrial Reit has struggled to convince investors that it is independent of ESR Group ever since it tried and failed to push through a lopsided merger with ESR-Reit in 2020.

This matter has cropped up yet again, amid a controversial proposal by activist investor Quarz Capital to internalise the manager of Sabana Reit. In its Jun 7 requisition for an extraordinary general meeting (EGM) to approve its internalisation proposal, Quarz said – among other things – that ESR Group’s ownership of the managers of Sabana Reit and ESR Logos Reit (formerly ESR-Reit) creates potential conflicts of interest.

On Jun 22, in a lengthy rebuttal to “misleading assertions” made by Quarz in the requisition letter, the manager of Sabana Reit insisted it operates independently of ESR Group.