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Sabana REIT: Shariah compliant.

Thursday, November 11, 2010

We have another IPO coming up and it is a Shariah compliant REIT: Sabana REIT.

The REIT will sell about 605.8 million units at $1.00-$1.10 each with a distribution yield of 8.45% for 2011 and 8.48% for 2012 based on the minimum offer price.



What does it mean to be Shariah compliant?

Shariah prohibits the payment or acceptance of interest fees for loans of money, for specific terms, as well as investing in businesses that provide goods or services considered contrary to its principle. Source: Wikipedia.

So, we can imagine that businesses which deal in alcohol and pork would not be allowed as tenants, for examples. It would be interesting to see how this REIT performs in time. Something different to enrich the REIT landscape in Singapore.

6 comments:

Raelynn said...

it's like the rise in Islamic Banking in singapore. it'll be quite interesting i suppose. but this website indicates that it is an industrial reit.
http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_601475.html

AK71 said...

Hi Raelynn,

Yes, it is an industrial property S-REIT which controls 15 properties in Singapore.

The yield is pretty good but I will wait for more details before deciding whether to invest in this. :)

la papillion said...

Hi AK,

I also got one post on this reit :)

http://bullythebear.blogspot.com/2010/11/sabana-shariah-compliant-reit.html

AK71 said...

Hi LP,

Wow. I think we posted at about the same time. Great timing! ;)

Thanks for sharing the link. :)

Anonymous said...

for the past few days and sometime before, I had been trying to find out who is the manager & sponsor of this REITs. So far no clue (or that I had missed it).

Yield may be good upfront to attract but without a better understanding to their portfolio, managers and such, I rather take a wait and see.

Have sufficient choices (and are comfortable with) in the 7 - 9% yield range.

SnOOpy168

AK71 said...

Hi SnOOpy168,

I have made it a practice not to bother with IPOs for some time now. Will let the dust settle before deciding on this one. :)

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