Sumary of Sabana Reit to remove requirement for syariah compliance:
- Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (Sabana Reit) will no longer be bound by the requirement for its business to be managed in compliance with syariah investment principles, its manager said yesterday.
- The change will take effect on or around Oct 21. “Having said this, we are exploring options to remain a viable investment for syariah investors and to potentially remain on relevant indexes,” said the manager.
- The Reit’s revised investment mandate will be to principally invest in income-producing real estate used for industrial purposes in Asia, as well as real estate-related assets.
- It will also be renamed Sabana Industrial Reit from the effective date of change.
- Sabana Reit is one of the largest syariah-compliant Reits in the world in terms of total asset size.
- Removing syariah compliance will also enable Sabana Reit to appeal to a wider pool of investors at a time when the total percentage of units held by syariah investors has decreased to just 2 per cent as at March 31 this year from 12.3 per cent as at Dec 31, 2011, the manager said.
- To comply with syariah principles, the manager currently has to ensure that the total rental income from lessees, tenants and/or sub-tenants engaging in activities prohibited under syariah guidelines does not exceed 5 per cent a year of Sabana Reit’s gross revenue.
- As Sabana Reit has been listed for more than three years, unit holders’ approval is not required under the listing manual and the trust deed, said the manager.