Quarz Capital Management And Black Crane Capital Issue Open Letter To The Management And Board Of Sabana Reit (SGX: M1GU)

SINGAPORE,March 26,2021 -- Quarz Capital Management and Black Crane Capital issue open letter to Sabana REIT Manager calling for the,1) immediate resignation of the earlier nominated new directors,and 2) tabling of the new director candidates proposed by Quarz and Black Crane for independent unitholders' endorsement in the AGM in 2021

QUARZ CAPITAL MANAGEMENT AND BLACK CRANE CAPITAL ISSUE OPEN LETTER TOTHE MANAGEMENT AND BOARD OF SABANA REIT (SGX: M1GU)

.ALL RECIPIENTS ARE ADVISED TO READ

"IMPORTANT DISCLOSURE INFORMATION"

AT THE END OF THE ATTACHED LETTER

26 March 2021

NEW DIRECTORS' RESIGNATION SHOULD BE EFFECTIVE IMMEDIATELY

PROPOSAL OF DIRECTOR CANDIDATES FULLY COMMITTED TO PROTECTING UNITHOLDERS' INTEREST

Dear Mr. Han,Management and Members of the Board of Sabana REIT Manager,

Independent unitholders applaud MAS for enabling the endorsement of the new independent directors to safeguard and align the interest of Sabana REIT manager with independent unitholders (who hold more than 75% of the units of Sabana REIT ( SSREIT SP Equity )). The protection of independent unitholders' interests further increases the confidence of global investors in the Singapore REIT market and enhances the reputation of Singapore as a pre-eminent financial center in Asia.

This 'bizarre debacle' where two new independent directors resigned within 3 months of their appointments clearly demonstrates the lack of engagement and seeming misalignment of interest between Sabana REIT Manager and Sabana independent unitholders. It again reflects poorly on Sabana REIT Manager,the sponsor ESR Cayman (HKG: 1821) and the directors.

As clearly stated in the Securities and Future Act,REIT managers and their directors have a legal obligation to act in the best interests of unitholders,and prioritise unitholders' interests over those of the REIT manager and its shareholders.

We reiterate our demands which should be aligned and represent the interest and intentions of all unitholders:

1) Return of fees (S$2.7million) for the 'failed merger' as it is fully the responsibility of Sabana REIT Manager

2) Sabana REIT Manager to commit to clear targets and deliverables to improve Sabana REIT and close the substantial valuation gap including exploring options beyond business as usual

3) Appointment of independent board members who are committed to prioritize unitholders' interests over those of the REIT manager and its shareholders.

If the directors are unable to fully commit to their fundamental responsibility of adhering to the regulation and their fiduciary duties to unitholders,it is correct for them to resign.

WE ALSO CALL ON THE RESIGNATION OF THE NEW DIRECTORS TO BE EFFECTIVE IMMEDIATELY (INSTEAD OF ON 26th APRIL 2021).

This is so that Sabana REIT Manager can immediately nominate new directors to be endorsed by independent unitholders in the AGM in 2021. We question the intention to make the resignation effective on 26th April 2021 despite the clear intentions of the 2 directors to not commit to their directorship role.

Is this a tactic by Sabana REIT Manager to bypass the endorsement requirements in April 2021 AGM and 'outmaneuver' MAS regulation which has been put in place to safeguard unitholders' interest to only benefit Sabana REIT Manager and its shareholders?

If this is so,isn't Sabana REIT Manager in outright breach of both the Securities and Futures act to prioritize unitholders' interests and the MAS implemented safeguard to protect unitholders?

Our decision not to endorse the new directors until further discussions was based on our observations from our meeting with them.

As stated in our previous letter and communications with the REIT Manager,we are still open to further discussion and engagement with Sabana REIT Manager and have already separately proposed suitable director candidates to the REIT Manager whom we believe are fully committed to protect unitholders' interest and increase the unitholder value of Sabana REIT. We believe that directors who can explore the full range of options for Sabana REIT to close the substantial valuation gap are required and not just directors who are suited to the continuation of 'business as usual'.

We want to make Sabana REIT Manager aware,that 'simply' nominating another 2 directors without independent unitholders endorsement and support to serve until the next AGM is unacceptable to us. We would consider this to be a 'circumvention' and 'exploitation of loopholes' of the safeguarding measures and regulation put in place by MAS to protect independent unitholders.

WE AGAIN URGE SABANA REIT MANAGER TO 'ENGAGE AND LISTEN' TO INDEPENDENT UNITHOLDERS IN THEIR SEARCH FOR SUITABLE DIRECTOR CANDIDATES NOW.Independent unitholders collectively own more than 75% of Sabana REIT and want only the best for the REIT. It is puzzling to us how the REIT Management and directors continue to act against its own independent unitholders.

We also call on ESR Cayman ( 1821 HK Equity ) as the sponsor of Sabana REIT Manager to finally stop 'hiding' under the pretext of independence and commit to be fully aligned with and support independent unitholders. The full alignment of interest will only serve to benefit all Sabana REIT unitholders.

WE INVITE ALL SABANA REIT UNITHOLDERS TO VISIT AND REGISTER AT THE WEBSITE WE HAVE PREPARED FOR INFORMATIONAL PURPOSES AT WWW.SAVESABANAREIT.COM

We look forward to our further discussions and working together to increase unitholder value and return at Sabana REIT.

Sincerely yours,

Jan F.Moermann

CIO,Quarz Capital Management

Peter Kennan

CIO,Black Crane Capital

For further information,please contact:

info@savesabanareit.com

Or visit:

www.savesabanareit.com

IMPORTANT DISCLOSURE INFORMATION

SPECIAL NOTE REGARDING THIS LETTER

THIS LETTER CONTAINS OUR CURRENT VIEWS ON THE VALUE OFSABANAREIT'S SECURITIES AND ACTION THATSABANAREIT'S BOARD MAY TAKE TO ENHANCE THE VALUE OF SABANAREIT'S SECURITIES. OUR VIEWS ARE BASED ON OUR ANALYSIS OF PUBLICLY AVAILABLE INFORMATION AND ASSUMPTIONS WE BELIEVE TO BE REASONABLE. THERE CAN BE NO ASSURANCE THAT THE INFORMATION WE CONSIDERED IS ACCURATE OR COMPLETE,NOR CAN THERE BE ANY ASSURANCE THAT OUR ASSUMPTIONS ARE CORRECT.SABANAREIT'sACTUAL PERFORMANCE AND RESULTS MAY DIFFER MATERIALLY FROM OUR ASSUMPTIONS AND ANALYSIS. WE HAVE NOT SOUGHT,NOR HAVE WE RECEIVED,PERMISSION FROM ANY THIRD-PARTY TO INCLUDE THEIR INFORMATION IN THIS LETTER. ANY SUCH INFORMATION SHOULD NOT BE VIEWED AS INDICATING THE SUPPORT OF SUCH THIRD PARTY FOR THE VIEWS EXPRESSED HEREIN. WE DO NOT RECOMMEND OR ADVISE,NOR DO WE INTEND TO RECOMMEND OR ADVISE,ANY PERSON TO PURCHASE OR SELL SECURITIES AND NO ONE SHOULD RELY ON THIS LETTER OR ANY ASPECT OF THIS LETTER TO PURCHASE OR SELL SECURITIES OR CONSIDER PURCHASING OR SELLING SECURITIES. NOTHING HEREIN SHALL CONSTITUTE OR BE REGARDED AS INVESTMENT ADVICE. ALTHOUGH WE STATE IN THIS LETTER WHAT WE BELIEVE SHOULD BE THE VALUE OFSABANAREIT'S SECURITIES,THIS LETTER DOES NOT PURPORT TO BE,NOR SHOULD IT BE READ,AS AN EXPRESSION OF ANY PROJECTION,FORECAST OR PREDICTION AS TO THE PRICE AT WHICHSABANAREIT'SSECURITIES MAY TRADE OR MAY BE LIKELY TO TRADE AT ANY TIME. AS NOTED,THIS LETTER EXPRESSES OUR CURRENT VIEWS ONSABANAREIT. IT ALSO DISCLOSES OUR CURRENT HOLDINGS OFSABANAREITSECURITIES. OUR VIEWS AND OUR HOLDINGS COULD CHANGE AT ANY TIME. WE MAY SELL ANY OR ALL OF OUR HOLDINGS OR INCREASE OUR HOLDINGS BYPURCHASING ADDITIONAL SECURITIES. WE MAY TAKE ANY OF THESE OR OTHER ACTIONS REGARDINGSABANAREITWITHOUT UPDATING THIS LETTER OR PROVIDING ANY NOTICE WHATSOEVER OF ANY SUCH CHANGES. INVESTORS SHOULD MAKE THEIR OWN DECISIONS REGARDINGSABANAREITAND ITS PROSPECTS WITHOUT RELYING ON,OR EVEN CONSIDERING,ANY OF THE INFORMATION CONTAINED IN THIS LETTER.

As of the publication date of this letter,Quarz Capital Management Ltd. / Black Crane Capital and its affiliates (collectively "Quarz" and "Black Crane"),others that contributed research to this letter and others that we have shared our research with (collectively,the "Authors") have long positions in and own options on the securities of SABANAREIT and stand to realize gains in the event that the price of such securities increases. Following publication of this letter,the Authors may transact in the securities of SABANAREIT. All content in this letter represent the assumptions and opinions of the Authors as of the publication date of this letter. The Authors have obtained all information herein from sources they believe to be accurate and reliable. However,such information is presented "as is",without warranty of any kind – whether express or implied. The Authors make no representation,express or implied,as to the accuracy,timeliness,reliability,fairness or completeness of any such information,opinions or conclusions expressed herein or with regard to the results obtained from its useand no liability whatsoever is accepted for any loss arising directly or indirectly as a result of any person acting upon any information,opinion or conclusion contained in this letter. All expressions of opinion are subject to change without notice,and the Authors do not undertake to update or supplement this letter,or any information,opinions or conclusions contained herein.

This letter is for informational purposes only and it is not intended as an official confirmation of any transaction. All market prices,data and other information are not warranted as to completeness or accuracy and are subject to change without notice. The information included in this letter is based upon selected public market data and reflects prevailing conditions and the Authors' views as of this date,all of which are accordingly subject to change. The Authors' assumptions,opinions and estimates constitute a best efforts judgment and should be regarded as indicative,preliminary and for illustrative purposes only.

Any investment involves substantial risks,including,but not limited to,pricing volatility,inadequate liquidity,and the potential complete loss of principal. The estimated fundamental value of the securities covered herein as expressed in this letter only represents a best efforts estimate of the potential fundamental valuation of a specific security,and is not expressed as,or implied as,assessments of the quality of a security,a summary of past performance,or an actionable investment strategy for an investor.

This letter does not in any way constitute an offer or solicitation of an offer to buy or sell any investment,security,or commodity discussed herein or of any of the affiliates of the Authors. Also,this letter does not in any way constitute an offer or solicitation of an offer to buy or sell any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction. To the best of the Authors' abilities and beliefs,all information contained herein is accurate and reliable. The Authors reserve the rights for their affiliates,officers,and employees to hold cash or derivative positions in any company,entity or securities discussed in this letter at any time. As of the original publication date of this letter,investors should assume that theAuthors are holding long position inSABANAREITand have positions in financial derivatives that reference this security and stand to potentially realize gains in the event that the market valuation of SABANAREIT'ssecurities is higher than prior to the original publication date. These affiliates,and individuals shall have no obligation to inform any investor about their historical,current,and future trading activities. In addition,the Authors may benefit from any change in the valuation of any other companies,securities,or commodities (if any) discussed in this document. Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of the Authors' operations and their affiliates. The compensation structure for the Authors' analysts is generally a derivative of their effectiveness in generating and communicating new investment ideas and the performance of recommended strategies for the Authors. This could represent a potential conflict of interest in the statements and opinions in the Authors' documents.

The information contained in this letter may include,or incorporate by reference,forward- looking statements,which would include any statements that are not statements of historical fact. Any or all of the Authors' forward-looking assumptions,expectations,projections,intentions or beliefs about future events may turn out to be wrong. These forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks,uncertainties and other factors,most of which are beyond the Authors' control. Investors should conduct independent due diligence,with assistance from professional financial,legal and tax experts,on all securities,companies,and commodities discussed in this letter and develop a stand-alone judgment of the relevant markets prior to making any investment decision.

FORWARD-LOOKING STATEMENTS

CERTAIN STATEMENTS CONTAINED IN THIS LETTER ARE FORWARD-LOOKING STATEMENTS INCLUDING,BUT NOT LIMITED TO,STATEMENTS THAT ARE PREDICTIONS OF OR INDICATE FUTURE EVENTS,TRENDS,PLANS OR OBJECTIVES. RELIANCE SHOULD NOT BE PLACED ON SUCH STATEMENTS BECAUSE,BY THEIR NATURE,THEY ARE SUBJECT TO KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES. FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE OR ACTIVITIES AND ARE SUBJECT TO MANY RISKS AND UNCERTAINTIES. DUE TO SUCH RISKS AND UNCERTAINTIES,ACTUAL EVENTS OR RESULTS OR ACTUAL PERFORMANCE MAY DIFFER MATERIALLY FROM THOSE REFLECTED OR CONTEMPLATED IN SUCH FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF THE FUTURE TENSE OR OTHER FORWARD-LOOKING WORDS SUCH AS "VIEW," "BELIEVE," "CONVINCED," "EXPECT," "ANTICIPATE," "INTEND," "PLAN," "ESTIMATE," "SHOULD," "MAY," "WILL," "OBJECTIVE," "PROJECT," "FORECAST," "BELIEVES," "CONTINUE," "STRATEGY," "PROMISING," "POTENTIAL," "POSITION" OR THE NEGATIVE OF THOSE TERMS OR OTHER VARIATIONS OF THEM OR BY COMPARABLE TERMINOLOGY.

IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE EXPECTATIONS SET FORTH IN THIS LETTER INCLUDE,AMONG OTHER THINGS,THE FACTORS IDENTIFIED IN THE RISK SECTIONS INSABANAREIT'SANNUAL REPORT FOR THE YEAR ENDEDDECEMBER31ST,2019AND PROSPECTUS. SUCH FORWARD-LOOKING STATEMENTS SHOULD THEREFORE BE CONSIDERED IN LIGHT OF SUCH FACTORS,AND QUARZ CAPITAL MANAGEMENT AND BLACK CRANE CAPITAL ARE UNDER NO OBLIGATION,AND EXPRESSLY DISCLAIMS ANY INTENTION OR OBLIGATION,TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS,WHETHER AS A RESULT OF NEW INFORMATION,FUTURE EVENTS OR OTHERWISE,EXCEPT AS REQUIRED BY LAW.