Sabana REIT: Sell at 46.5c to Volare Group?

One month ago, I blogged about the offer of 46.5c a unit by Volare Group to increase their stake in Sabana REIT by another 10%.

I have looked at the offer documents yesterday and it seems that those who decide to offer some or all of their investment in Sabana REIT for sale will get 45.04c a unit instead of 46.5c.

The very first section of the offer documents explains what "you will get for your units."

"S$0.465 in cash - S$0.0146 distribution = S$0.4504."

So, it seems to me that Volare Group is using the incoming income distribution from the REIT to help fund their purchase.

Is this offer still attractive?

Well, there are many ways to look at this and if we are to only look at the numbers, netting 45.04c a unit is still pretty attractive.

We don't have to incur any brokerage fee.

Sabana REIT was trading at 42.5c a unit the last I checked.

So, we could offer to sell all or some of our investment to Volare Group and buy an equivalent number of units from Mr. Market if we wished to retain the same level of exposure to the REIT.

This is an arbitrage opportunity to make some pocket money, if we want to take advantage of it.

There is risk, however.

The offer will only succeed if 10% or more of Sabana REIT's units are tendered.

If the offer should fail, this arbitrage strategy would saddle us with more units of Sabana REIT than what we started out with.

So, think carefully.

If I were to do this, I would remind myself of a couple of points.

1. Use only money which has been earmarked for investing for income.

2. Do not buy more Sabana REIT units than what I am comfortable holding in total in case the offer fails.

Personally, I won't be doing it.

Don't I want to make some extra pocket money?

Well, it isn't going to be that significant a gain unless I take a huge gamble.

A huge gamble?

A difference of 2.5c a unit = $25 per 1000 units.

So, I would have to buy some 100,000 units from Mr. Market while tendering the same amount to Volare Group if I wished to make $2,500.

I would have to fork out $42,500 before fees.

I don't have that money in my war chest now and even if I have that money, I would not do it because I am happy with how my portfolio looks now.

If I had a smaller investment in Sabana REIT, I might do it if I had the money but I feel that my exposure to the REIT is appropriately sized.

Appropriately sized?

Mustn't just look at the size of my investment in Sabana REIT.

I remind myself that I already have a very large exposure to industrial REITs with AIMS APAC REIT being my largest investment in this space.

Anyway, this is just me talking to myself as usual.

If anyone is thinking of arbitrage, good luck.

Huat ah!

Reference:
Offer of 46.5c per unit.

Evening with AK and friends 2023. Incoming!

I absolutely did not see this coming.

I did not plan to have another "Evening with AK and friends" this year or the next either, to be honest.

Inertia is a terrible thing.

Always lazy but grown lazier.

Terrible, I know.

However, my comments section was buzzing with requests for a comeback event a couple of weeks ago and that gave me a nudge.

If you are unaware of the buzz, see comments section: HERE.

Anyway, my friend from The Fifth Person, Kenji, saw the comments and said my readers missed me and offered to organize a comeback event.

So, it seems that "Evening with AK and friends 2023" is happening soon.

AK has been out of the limelight for many years.

Only active in my blog, boycotting Facebook, means a lot less interaction online.

It has become harder for anyone to contact AK as even my email link has gone out of service.

My blog's comments section is the only line of communication left open and, even so, anonymous comments are blocked.

This means that apart from talking to myself, I only talk to regular long time readers most of the time in my blog.

This is all by design and I am happier this way.

Regular long time readers might remember that tickets to past "Evening with AK and friends" sold out within 24 hours of launch.

However, I suspect that it might take much longer for tickets to be sold out this time as I don't think AK is as popular as before.

So many new local bloggers and also YouTubers popped up in the last few years in the personal finance and investment space.

A number of social media influencers shared their sexy ways to get rich quick or to 10x our money too.

Not surprisingly, they attract many followers.

AK is out of fashion which is true in more ways than one. 

To be honest, this is fine by me.

Still, some fellow bloggers might question why I would give up years of progress made as a blogger and retreat to my little corner in cyberspace?

The answer is simple.

AK is a hobbyist blogger.

Blogging is a hobby.

If I were blogging to make a living, then, I would have done things differently in the last few years.

If blogging became a business or a career, however, I am sure I would not like it as much.

Anyway, this is just a heads up that "Evening with AK and friends 2023" is happening.

There will either be 150 or 300 tickets available, depending on how lucky we are with the venue.

For sure, the event will be happening before the middle of the year.

Time is going to be 7pm to 10pm like before.

More details will be available very soon.

So, look out for it.

It is all about pASSIve income!

It has been almost 5 years but we are back!

I have always wanted to say something like this.

So drama. :)

Reference:
Financial freedom and a long break from public appearances. (Give me F.I.R.E.)

Recently published:
Changes to portfolio in Feb 2023.