On 17 April 2014, I said that if we were to demand an 8% distribution yield from Sabana REIT, unit price would have to decline to 94c a unit. It seems that Mr. Market has been quite happy to accept a distribution yield of 7.16% or, perhaps, Mr. Market expects DPU to improve in the following months. Whatever the reason, Sabana REIT's unit price has been hovering at the level of $1.05.
For reasons I listed in the same blog post, I reduced my exposure to Sabana REIT substantially. With more master leases expiring by end of 2014, there is a chance that things could worsen and income could come under pressure.
The news that Innotek Limited which has 15,000,000 units of Sabana REIT is making a full divestment could send unit price of Sabana REIT declining in the coming weeks. Innotek Limited paid $1.05 a unit for this investment made in......