Unitholders Demand Sabana REIT Manager (SGX:M1GU) to Promptly Conduct the Requistioned EGM for the Endorsement of Mr Chan Wai Kheong as a Director

SINGAPORE,July 8,2021 -- Quarz Capital Management and Black Crane Capital issued an open letter to the Management and Board of Sabana REIT.

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

ALL RECIPIENTS ARE ADVISED TO READ

"IMPORTANT DISCLOSURE INFORMATION"

AT THE END OF THE ATTACHED LETTER

8 July 2021

Unitholders Demand Sabana REIT Manager to Promptly Conduct the Requisitioned EGM for the Endorsement of Mr Chan Wai Kheong as a Director

– We Call on Mr Chan to 'stop hiding' and Put Himself up for Endorsement

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

We refer to the response from Sabana Real Estate Investment Management ("Sabana REIT Manager",or "REIT Manager") (28June 2021) to our requisition (and the rationale) to convene an EGM (25of June 2021) where the board has openly refused to convene the requisitioned EGM promptly to allow independent unitholders to endorse Mr Chan Wai Kheong ("Mr Chan") as an independent Non-executive Director in accordance with the requirements imposed by MAS.

The (lack of) courage to face independent unitholders

Given that the board has strongly promoted Mr Chan's strong credentials,backed his appointment despite the potential conflict of interest issues,and believe that he can be an independent director who represents unitholders' interests,we see no reason why Mr Chan's appointment should not be put up for endorsement by independent unitholders in a prompt manner.

In fact,we are puzzled by the board's strong reaction and reluctance to put Mr Chan's appointment up for endorsement promptly. Is the board's refusal to hold the EGM promptly attributed to it being aware that Mr Chan's appointment does not have the support of independent unitholders due to his significant prior business relationships with ESR Cayman and substantial stake in a competitor?

If this is so,isn't this a public acknowledgement by the board that it has appointed a director who is unsuitable to represent and safeguard independent unitholders' interests?

We call on Mr Chan to "stop hiding" and put himself up for endorsement immediately. Given Mr Chan's strong desire to become a director of Sabana REIT Manager,he should have the courage to face the independent unitholders in an EGM to be held in a timely and prompt manner and adhere to the endorsement requirement specified by MAS. This will show that Mr Chan is truly committed to protecting independent unitholders in line with his fiduciary and director's duties.

Stop "circumventing" the regulation and start fulfilling your duties!

We remind the board members of their fiduciary dutiesspecifically with reference to Sections 286 (10A) and 286(10B) of the Securities and Futures Act,which stipulates that REIT managers and their directors must act in the best interest of all unitholders and prioritize unitholders' interests over those of the REIT manager and its shareholders.

The refusal to hold the EGM in a prompt manner is puzzling. The EGM was requisitioned to allow independent unitholders who hold over 75% of Sabana REIT's total unitholdings to timely evaluate and promptly endorse / vote on whether the new board member can represent and safeguard unitholders' interests and if it is clearly in the best interest of independent unitholders. As such,if the board members claim that they fulfill the duties specified in Sections 286 (10A) and 268 (10B) of the Securities and Futures Act,they should allow the requisitioned EGM to be held promptly.

If the Board is fully confident of Mr Chan's independence and that he has the support of independent unitholders,there is also no reason to wait for the next annual general meeting in 2022 for Mr Chan's endorsement.

MAS has put in place the endorsement requirements to ensure that the current board will appoint a new director who is independent and can safeguard independent unitholders' interests,ensure good corporate governance and prevent the potential conflict of interest issues that can be created through ESR Cayman's ownership of 2 REIT Managers operating in the same sector.

Such endorsement requirement was also specifically imposed by MAS after the failure of the value destructive merger proposed by the board which was comprehensively rejected by more than ~60% of all independent unitholders (despite it requiring 75% supermajority of independent unitholders support) and cost unitholders more than ~$2.1million in fees as a safeguard against the potential conflicts faced by the Board.

By postponing the endorsement to the next AGM which is 10 months' away,the board of Sabana REIT Manager is effectively 'circumventing' and 'bypassing' MAS regulationi.e. Sabana REIT Manager could repeatedly appoint a director right after an AGM who is 'aligned to its view' instead of prioritizing independent unitholders' interests. The REIT Manager can then again refuse to conduct any EGM until the next AGM (which is 12 months away) akin to what is happening now. When the director is not endorsed in the next AGM,the REIT Manager can simply appoint another director 'aligned to its view' without getting endorsement from unitholders and repeatedly exploit this loophole.

This will essentially allow Sabana REIT Manager to 'bypass' MAS's specific safeguard to protect Sabana unitholders and render such endorsement requirement futile and ineffective.

We urge the board of Sabana REIT Manager to fulfill their directors' and fiduciary duties and hold the requisitioned EGM to put Mr Chan's appointment up for endorsement by independent unitholders in accordance with the requirements imposed by MAS as soon as practicable and without delay,not later than 2 months after the receipt by the Company of our requisition notice of 25 June 2021.

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 OF SABANA REIT'S ( SSREIT SP EQUITY ) SECURITIES AND ACTION THAT SABANA REIT'S BOARD MAY TAKE TO ENHANCE THE VALUE OF SABANA REIT'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. SABANA REIT's ACTUAL 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 OF SABANA REIT'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 WHICH SABANA REIT'S SECURITIES MAY TRADE OR MAY BE LIKELY TO TRADE AT ANY TIME. AS NOTED,THIS LETTER EXPRESSES OUR CURRENT VIEWS ON SABANA REIT. IT ALSO DISCLOSES OUR CURRENT HOLDINGS OF SABANA REIT SECURITIES. OUR VIEWS AND OUR HOLDINGS COULD CHANGE AT ANY TIME. WE MAY SELL ANY OR ALL OF OUR HOLDINGS OR INCREASE OUR HOLDINGS BY PURCHASING ADDITIONAL SECURITIES. WE MAY TAKE ANY OF THESE OR OTHER ACTIONS REGARDING SABANA REIT WITHOUT UPDATING THIS LETTER OR PROVIDING ANY NOTICE WHATSOEVER OF ANY SUCH CHANGES. INVESTORS SHOULD MAKE THEIR OWN DECISIONS REGARDING SABANA REIT AND 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 ( SSREIT SP ) 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 the Authors are holding long position in SABANA REIT and have positions in financial derivatives that reference this security and stand to potentially realize gains in the event that the market valuation of SABANA REIT's securities 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,2020AND 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.