Ar 2011

AB VE BEY ND
SABANA SHARIAH COMPLIANT REIT

ANNUAL REPORT 2011
Sabana Shariah Compliant REITs Properties at A Glance
Contents
2 3 4 7 8 11 16 19 25 26 33 47 48 49 50 61 63 64 103 106 About Us Our Objective Our Strategy The Manager Structure of Sabana Shariah Compliant REIT 2010 / 2011 Signicant Events Financial Highlights Letter from Chairman & CEO Operations & Financial Review Board of Directors Management Team Property Locations Property Portfolio Independent Market Study Shariah Compliance Corporate Social Responsibility Investor Relations Corporate Governance Risk Management Corporate Directory Financials Statistics of Unitholdings Additional Information
Our Strategy
Acquisition growth strategy We aim to expand our portfolio by acquiring properties that are aligned with Sabana Shariah Compliant REITs investment strategy and Shariah principles. This will enable our Unitholders to enjoy high income distribution. Active asset management strategy We will pro-actively manage and maintain the properties in our portfolio to improve the overall rental yields. Opportunistic development strategy The Manager will prudently undertake development activity when appropriate opportunities arise. Capital and risk management strategy The Manager will employ an appropriate mix of debt and equity in nancing acquisitions, and use the right instruments and currency hedges to optimise riskadjusted returns to Unitholders.
About Us
Sabana Shariah Compliant Industrial Real Estate Investment Trust (Sabana Shariah Compliant REIT or the Trust) is a real estate investment trust (REIT) listed on Singapore Exchange Securities Trading Limited (the SGX-ST) on 26 November 2010. Sabana Shariah Compliant REIT was established principally to invest in income-producing real estate used for industrial purposes, as well as real estaterelated assets, in line with Shariah investment principles. As at 31 December 2011, the Trust has an asset portfolio of 20 quality industrial properties in Singapore, valued at more than S$1.0 billion. Sabana Shariah Compliant REIT is managed by Sabana Real Estate Investment Management Pte. Ltd. (the Manager).
The Manager
The Manager was incorporated in Singapore on 15 March 2010 and is wholly-owned by Sabana Investment Partners Pte. Ltd. (SIP) of which the shareholders are Freight Links Express Holdings Limited (the Sponsor), Blackwood Investment Pte. Ltd. (Blackwood) and Tarian Capital Partners Pte. Ltd. (TCP), formerly known as Emirates Tarian Capital (S) Pte. Ltd.. Armed with deep knowledge and expertise on the Singapore industrial property market, the Manager sets the strategic direction for Sabana Shariah Compliant REIT, manages its assets, and makes recommendations to the Trustee on issues related to acquisitions, divestment and asset enhancements. In addition, the Manager adheres to guidelines set out by the Independent Shariah Committee to ensure that Sabana Shariah Compliant REIT has adopted a standard of Shariah compliance that is generally accepted by the GCC(1) in all aspects of its operation.
(1) Refers to Cooperation Council for the Arab States of the Gulf.
Our Objective
We work for unitholders of Sabana Shariah Compliant REIT (the Unitholders) our objective is to provide Unitholders with regular, stable cash distributions. We also aim to achieve long-term growth in distribution per Unit (DPU) and net asset value (NAV) per Unit, while maintaining an appropriate capital structure.
Structure of Sabana Shariah Compliant REIT
INDEPENDENT SHARIAH COMMITTEE
UNITHOLDERS
Advises the Manager on Shariah Compliance matters and issues the Shariah certication
Ownership of units
Distributions
Management t services MANAGER(1) Management t fees SABANA SHARIAH COMPLIANT REIT
Trustee fee TRUSTEE Acts on behalf of unitholders
100.0% Ownership
Ownership of assets
Net property income
Property management services PROPERTY MANAGER(2) Property management fees THE PROPERTIES
SABANA TREASURY PTE. LTD.
A whollyowned o subsidiary for s the t provision of o treasury services s
Notes (1) The Manager, Sabana Real Estate Investment Management Pte. Ltd. is 100.0% owned by SIP, a company incorporated in Singapore that is 51.0% owned by the Sponsor, 45.0% owned by Blackwood and 4.0% owned by TCP as at 31 December 2011. (2) The Property Manager, Sabana Property Management Pte. Ltd. is 100.0% owned by SIP, indirectly through the Manager.
ANNUAL REPORT 2011
2010 / 2011 Signicant Events
26 November 2010
IPO of Sabana Shariah Compliant REIT 632,800,000 units issued at S$1.05 per unit. Created the rst listed Shariah compliant REIT in Singapore and the biggest listed Shariah compliant REIT in the world by total assets.
21 March 2011
The Manager moves to 151 Lorong Chuan to be closer to tenants 151 Lorong Chuan accounts for approximately one-third of the portfolio revenue.
29 July 2011
Sabana Shariah Compliant REIT receives investment grade rating (BBB- long-term corporate credit rating with a stable outlook) by Standard & Poors
27 April 2011 26 February 2011

Islamic Finance News IPO Deal of the Year (2010) & Real Estate Deal of the Year (2010) awards Release of 1Q 2011 nancial results Sabana Shariah Compliant REIT outperforms IPO forecast in its first quarter with a DPU of 3.04 cents for the period from 26 November 2010 to 31 March 2011.
5 October 2011
Sabana Shariah Compliant REIT wins the Most Outstanding Islamic REIT at the Kuala Lumpur Islamic Finance Forum Islamic Finance Awards 2011
27 July 2011
Release of 2Q 2011 nancial results Sabana Shariah Compliant REIT continues to exceed IPO projections, reporting a DPU of 2.18 cents for 2Q 2011.
19 October 2011
Release of 3Q 2011 nancial results Sabana Shariah Compliant REIT reports on-forecast DPU of 2.14 cents for 3Q 2011. Sabana Shariah Compliant REITs IPO portfolio revalued upwards by S$50.1 million
15 December 2011
Acquisition of 6 Woodlands Loop Sabana Shariah Compliant REIT completes the acquisition of 6 Woodlands Loop, bringing the total number of buildings within the portfolio to 20. This is the last acquisition completed in 2011.
24 October 2011
Sabana Shariah Compliant REIT passes its rst Shariah audit since IPO
22 November 2011
Sabana Shariah Compliant REIT completes its rst acquisitions post IPO Sabana Shariah Compliant REIT expands its portfolio with the acquisitions of 3A Joo Koon Circle, 2 Toh Tuck Link and 21 Joo Koon Crescent, bringing its total assets under management past the S$1.0 billion mark.
7 December 2011
Acquisition of 39 Ubi Road 1 Sabana Shariah Compliant REIT completes the acquisition of 39 Ubi Road 1, bringing the total number of buildings within the portfolio to 19.
18 November 2011
S$144.3 million additional Murabaha facilities secured Sabana Shariah Compliant REIT achieves lower all-in cost of new debt to fund new property acquisitions, from approximately 4.8% per annum at IPO to 3.9% per annum and lower.
ANNUAL REPORT 2011
BEY ND EXPECTATIONS
S$1.08 billion
+22.3% since IPO Total Assets
Financial Highlights
Key Financial Figures

26 November 2010 31 December 2011 S$000 Actual(1) Forecast(2) Variance %
Gross revenue Net property income Distributable income DPU (cents) - For the period - Annualised Annualised distribution yield (%) - IPO price at S$1.050 - Closing price of S$0.875 on 30 Dec 2011
76,945 73,074 60,603 9.53 8.67 8.26 9.91
75,460 72,294 60,092 9.48 8.63 8.22 9.86
2.0 1.1 0.9 0.5 0.5 0.5 0.5
Selected Balance Sheet Data

S$000 As at 31 December 2011 Pro Forma(3) as at Listing Date Variance %
Total assets Debt, at amortised costs Net assets attributable to Unitholders Units in issue and to be issued entitled to distribution (000) Net asset value (NAV) per Unit (S$) Adjusted NAV per Unit (S$)
1,082,316 359,865 681,782 637,295 1.07 1.05
884,636 215,126 627,769 632,800 0.99 0.99
22.3 67.3 8.6 0.7 8.1 6.1
Debt Prole
As at 31 December 2011
Unit Price Performance(4)

S$
Aggregate leverage Total debt Fixed as % of total debt Weighted average all-in nancing cost Weighted average tenor of debt Interest cover
34.1% S$364.8 million 96.7% 4.4% 2.2 years 7.4 times
IPO issue price Unit opening price on 26 November 2010 Unit closing price on 30 December 2011 Highest unit price Lowest unit price Volume traded (million units) Unit price performance
(5)
1.050 0.990 0.875 1.030 0.835 549.72 -11.6%
(1) Actual refers to the results for the period 26 November 2010 (the listing date) to 31 December 2011. Sabana Shariah Compliant REIT was a dormant private trust from date of constitution until the initial portfolio of 15 properties were acquired on 26 November 2010 and ofcially listed on the same day on SGX-ST. Consequently, the operations of Sabana Shariah Compliant REIT commenced on 26 November 2010. (2) Based on gures for Forecast Year 2011 extracted from the IPO Prospectus dated 22 November 2010 (Prospectus), extrapolated for the period from the listing date to 31 December 2010 and for the period from 1 January 2011 to 31 December 2011, except for the change in fair value of investment properties which was not pro-rated. (3) Based on unaudited pro forma balance sheet on the listing date as disclosed in Prospectus. (4) Based on trading prices for the period from the listing date to 30 December 2011. (5) Performance is calculated on the change in the Unit Price over the period, based on the opening price on the listing date, compared with the closing price on the last trading day of the nancial period i.e. 30 December 2011.
ANNUAL REPORT 2011
Letter from Chairman & CEO
Mr Steven Lim Kok Hoong Chairman and Independent Non-executive Director
Mr Kevin Xayaraj Co-founder, Chief Executive Officer and Executive Director
Dear Unitholders
We launched the initial public offering (IPO) of Sabana Shariah Compliant REIT on a promiseto manage our assets well and create value for our investors. Based on our inaugural results, we are pleased to say we have achieved both.
Performing Above Expectations

For the financial period ended 31 December 2011 (FY2011), Sabana Shariah Compliant REIT generated S$76.9 million in gross revenue, 2.0% higher than our forecast at IPO. Net property income (NPI) was S$73.1 million, 1.1% higher than the forecast NPI of S$72.3 million. Total net income available for distribution was S$60.6 million, corresponding to annualised DPU of 8.67 cents for the period, 0.5% higher than forecast. Better-than-expected results like these are a testament to the teamwork and focus of everyone at Sabana Shariah Compliant REIT.
for 11 months at our 19 single-tenant properties. The exception was November and December 2011, when the master tenant of the property at 1 Tuas Ave 4 stopped paying rent, temporarily diluting the occupancy rate to 96.0%. Nevertheless, the Manager sprang to work and was already in the process of securing a new tenant at the time of print. We were also able to increase the total occupancy of the portfolios only multi-tenanted property at 9 Tai Seng Driveraising it from 96.1% to 98.4% during the year.
Increasing Our Value

By the third quarter of 2011, Sabana Shariah Compliant REITs initial portfolio (assembled in 2009-2010 during sluggish market conditions) gained S$50.1 million in value over its initial IPO valuation.
Keeping Occupancy High

By working closely to understand and support the needs of the master lessees, we achieved 100% occupancy
Shariah compliance not only increases our potential investor base, compared to conventional REITs listed in Singapore, but also provides access to more diverse sources of equity funding.
Post IPO, we continue to source for quality assets to enhance our portfolio. By the fourth quarter of 2011, we were able to add five new properties, expanding the portfolio past the S$1.0 billion mark. These new properties are all strategically located and yield-accretive. Their new master leases have helped reduce the portfolios lease expiry concentration in 2013 and 2015 by 10.1% and 2.8% respectively. In addition, the acquisitions improved our portfolios asset diversification, broadened our tenant base, and reduced dependence on any single asset class for our income stream.
Unit price performance(1)

Rebased (%)
110 105 100 95 90 85 80
Securing New Funding Options

We continue to explore different sources and methods of funding. In 2011, we were able to secure lower all-in cost of new debt to fund the new acquisitions. The five new acquisitions were funded at approximately 3.9% per annum and lower, compared to 4.8% per annum at its IPO. Along with enhanced funding, we are happy to report that Standard & Poors has rated Sabana Shariah Compliant REIT a BBB- long-term corporate credit rating and axA- ASEAN scale rating with a stable outlook. This occurred in July 2011 less than a year since the Trusts listing, and at a time when the global markets were plagued with uncertainties. With the credit rating, Sabana Shariah Compliant REIT has an aggregate leverage limit of up to 60.0%, enhancing the Trusts financial flexibility. As at 31 December 2011, Sabana Shariah Compliant REITs aggregate leverage was at 34.1%. Debt headroom was S$87.7 million based on 39.0% gearing, representing further capacity to support future acquisitions.
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Nov 10 Jan 11 Dec 11
FTSE ST RE INV EST TRUST FTSE Straits Times Index
Sabana Shariah Compliant REIT
Ftse St Re Invest Trust
Sabana Shariah Compliant Reit
Ftse Sti
% Change since IPO % Change in 2011
(14.17) (16.04)
(16.67) (10.26)
(16.23) (17.04)
Source: Bloomberg (1) For the period from the listing date to 30 December 2011.
Broadening Our Investor Base

Our adherence to high Shariah compliance standards provides Sabana Shariah Compliant REIT with the opportunity to tap into an additional pool of capital that of Shariah investors in the Gulf region and elsewhere. Shariah compliance not only increases our potential investor base, compared to conventional REITs listed in Singapore, but also provides access to more diverse sources of equity funding.
Addressing The Unit Price

Since its IPO, the unit price of Sabana Shariah Compliant REIT has dipped 16.7%, due to general market volatility, which has depressed stock prices in the overall public market. While the unit price is lower compared to that at IPO, data has shown that the Trust is still in line with its peers and the overall stock market (see Unit price performance chart). We are also pleased that a number of industry analysts have maintained a buy on Sabana Shariah Compliant REIT, that have reaffirmed the positive outlook on its performance.
ANNUAL REPORT 2011
Letter from Chairman & CEO
Since our IPO, Sabana Shariah Compliant REIT has received eight international awards an indicator of our growing recognition within the global investment community.
We will work on improving the occupancy of 9 Tai Seng Drive and explore building enhancement opportunities with the property. Additionally, we will continue to prepare for eventual expiry of those master leases which may not be renewed, such as through working on early renewals with underlying tenants. In terms of acquisition pipeline, the deal ow has remained robust and we expect to make selective acquisitions in 2012, if attractive opportunities arise. Lastly, with the yield accretion expected in 2012 from the ve new properties acquired in 2011, we are condent that Sabana Shariah Compliant REIT will be able to deliver the projected 2012 DPU of 8.67 cents as highlighted in the Prospectus.
Looking to The Future

Our commitment to comply with Shariah compliance standards set by GCC limits the total rental income from lessees, tenants and/or sub-tenants engaging in activities which are non-permissible under the Shariah investment principles to 5.0% or less. For the nancial period ended 31 December 2011, less than 0.3% of Sabana Shariah Compliant REITs gross revenue was considered to be non-Shariah income, well below the permissible limit. To increase global awareness of Sabana Shariah Compliant REIT, we continue to participate in investment and Islamic nance-related seminars and conferences, both in Singapore and abroad. Since its IPO, Sabana Shariah Compliant REIT has received eight international awards an indicator of our growing recognition within the global investment community. We would like to thank our Unitholders for your continuing support. Sabana Shariah Compliant REIT will be holding its rst Annual General Meeting for the Trust on 12 April 2012, and we look forward to meeting you then. We would also like to thank our Trustee, as well as our strategic partners, lenders and tenants for their continued support in our journey towards IPO and after. Finally, we would like to thank and honour the dedication, hard work and professionalism of the Board of Directors, the management and staff, which are essential to the success of Sabana Shariah Compliant REIT. We are pleased with our performance in 2011 and we expect 2012 to be another good year for the Trust. As we see it, our story is just beginning. This is the rst of many letters from us that we hope you will look forward to reading in the years ahead.
Working on The Fundamentals

Amidst subdued global economic conditions, the Monetary Authority of Singapore (MAS) expects Singapores economic growth for 2012 to be between 1.0 to 3.0 %(2). On the industrial property sector in Singapore, we expect rentals and capital values to be stable. While macroeconomic conditions are expected to continue to support a modest economic growth in 2012, uncertainties relating to the Eurozone debt crisis, political unrest in the North African and Middle East region may adversely affect Singapores economic growth. That said, we will continue to work on the fundamentals.
(2) Source: Ministry of Trade and Industry (MTI), Press Release, 16 February 2012.
Mr Steven Lim Kok Hoong Chairman and Independent Non-executive Director Mr Kevin Xayaraj Co-founder, Chief Executive Ofcer and Executive Director
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Operations & Financial Review
The signicant reasons for Sabana Shariah Compliant REITs better-than-expected performance in FY2011 were the high quality of its initial portfolio and the Managers discipline and focus on meeting goals announced at the IPO. This includes actively managing its existing portfolio properties, maintaining a prudent capital and risk management strategy and being highly selective in its acquisitions. The Trust delivered a DPU that surpassed the IPO forecast while positioning itself for potential DPU growth in 2012.
Solid Balance Sheet

As at 31 December 2011, Sabana Shariah Compliant REITs total asset base stood at approximately S$1.1 billion. As at the end of the nancial period, the Trusts NAV was S$1.07 per unit, an increase of 8.1% from pro forma NAV as at listing date. This is attributable to the S$51.3 million gains on revaluation of the Trusts initial 15 properties by independent valuers, recognised in the third quarter of 2011.
Financial Performance
From the date of commencement of its operations on 26 November 2010 to the nancial period ended 31 December 2011, Sabana Shariah Compliant REIT exceeded its gross revenue and NPI IPO forecasts by 2.0% and 1.1%, respectively. Total distributable income was S$60.6 million, surpassing its forecast by 0.9%. Annualised DPU was 8.67 cents, 0.5% higher than the IPO forecast of 8.63 cents. Based on the IPO price of S$1.05, the annualised distribution yield was 8.26%, above the IPO forecast of 8.22%. Actual DPU (cents) from 26 November 2010 to 31 December 2011
2.17 9.53
Prudent Capital Management

Since listing, the Manager has taken a prudent approach to managing the capital and liquidity requirements of Sabana Shariah Compliant REIT. As at 31 December 2011, the Trust had strong cash and cash equivalents of S$31.8 million and a healthy working capital in excess of S$6.3 million. Cash ow generated from operations was S$103.6 million. Net proceeds from the listing of the Trust and the drawdown of credit facilities were primarily used for the purchase of the investment properties, payment of issue expenses and nancing costs, in line with the intended applications as stated in the Prospectus.
2.14
Liquidity Management
The Manager continued to explore new options to strengthen the capital structure of Sabana Shariah Compliant REIT, such as securing different tranches of Shariah compliant debt to ensure greater diversication and exibility. In November 2011, the Manager secured an additional nancing package of up to approximately S$144.3 million, comprising a three-year Term Commodity Murabaha Facility of S$100.3 million (maturing on 21 November 2014), as well as a two-year Term Commodity Murabaha Facility of S$32.0 million (maturing on 26 November 2013). In addition, the Trust committed to a two-year Revolving Commodity Murabaha Facility of S$12.0 million, which is renewable on a quarterly basis(2). These were built upon an initial three-year Commodity Murabaha facility of S$220.6 million (maturing on 26 November 2013). Successfully securing the additional funding enabled the Manager to spread out the dates of maturity between 2013 and 2014, allowing Sabana Shariah Compliant REIT to have greater debt headroom. In addition, the Manager was able to negotiate the additional debt at a lower pricing, resulting in a lower all-in-cost of debt on the overall for the Trust.
2.18
2.17
0.87
Start
4Q 2010
1Q 2011
2Q 2011
3Q 2011
4Q 2011
2011
Cumulative DPU (cents) 26 November 2010 to 31 December 2011

9.53 9.48 Actual Forecast(1) 7.36 7.31 5.22 5.13 3.04 2.98 0.87 0.85 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011
(1) Based on the forecast, together with the accompanying assumptions, shown in the Prospectus. (2) The Revolving Commodity Murabaha Facility was fully drawn down as at 31 December 2011 and will expire on 26 November 2013.
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Prot Rate Risk Management

In line with its objective to provide regular and stable distributions to its Unitholders, the Manager hedged Sabana Shariah Compliant REITs prot rate exposure on S$352.8 million, which is equivalent to 96.7% of total outstanding credit facilities, via individual prot rate swaps for the entire tenor of the three Term Commodity Facilities. As part of its plan to spread out maturity dates of its credit facilities and to diversify future funding sources, the Manager will be exploring, amongst others, the establishment of Shariah Compliant Medium Term Note (MTN) Programme and Convertible Bonds in 2012 and beyond.
Valuation by Asset Class(5)

Asset Classication 30 September 2011 (S$m) 30 September 2010 (S$m)
High-tech Industrial Chemical Warehouse & Logistics Warehouse & Logistics General Industrial Total Asset Value
534.5 146.5 170.2 50.1 901.3
498.7 141.0 163.0 48.5 851.2
Comfortable Debt Headroom

Sabana Shariah Compliant REITs aggregate leverage was 34.1% at the end of 2011, well within the aggregate leverage limit of 60%(3) as set out in Appendix 6 of the Property Funds Appendix of the Code on Collective Investment Schemes (CIS Code) issued by the MAS. Based on a target aggregate leverage limit of up to 40%, the Trust still had sufcient debt headroom and nancial exibility to pursue more yield-accretive acquisitions after 31 December 2011.
Signicant Progress in Portfolio Build-up Since IPO

Since listing, the Manager continued to actively pursue acquisition opportunities. By the second half of 2011, Sabana Shariah Compliant REIT was able to conclude transactions of ve new yield-accretive properties of about S$147.5 million. The ve new acquisitions, namely the properties at 21 Joo Koon Crescent, 3A Joo Koon Circle, 2 Toh Tuck Link, 39 Ubi Road 1 and 6 Woodlands Loop, brought the total number of properties in Sabana Shariah Compliant REIT portfolio from 15 to 20, which equates to a total asset value of more than S$1.0 billion.
Debt Prole as at 31 December 2011

Debt maturity prole (S$ million)
252.5
Improved Diversication: Asset Type, Lease Structure & Customer Base

Sabana Shariah Compliant REITs portfolio saw improved diversication in various areas in 2011 which, was largely attributed to the acquisitions made in 2011. With new master leases concluded, the lease expiry concentration of the Trusts portfolio in 2013 and 2015 was reduced. As of 31 December 2011, the weighted average lease term to expiry based on gross revenue of the portfolio was 2.9 years, while the weighted average unexpired lease term for underlying land by gross oor area (GFA) was 40.2 years. The new transactions brought ve new quality master tenants into Sabana Shariah Compliant REIT. Together with active leasing of the portfolio, this brought the total tenants(6) within the Sabana Shariah Compliant REIT portfolio to 140, a signicant increase from 101 tenants on the date of listing.
(3) The aggregate leverage of a property fund may exceed 35% of the funds deposited property only if a credit rating of the Property fund from Fitch, Moodys or Standard and Poors is obtained and disclosed to the public. (4) The valuation was based on Direct Comparison Method, Capitalization Approach and Discounted Cash Flow Analysis. (5) Based on 15 properties; excluding the new acquisitions of 6 Woodlands Loop, 39 Ubi Road 1, 3A Joon Koon Circle, 21 Joon Koon Crescent & 2 Toh Tuck Link. (6) Includes sub-tenants under master leases and direct tenants of 9 Tai Seng Drive.
100.3 12.0 2011 2012 2013 2014
Initial Portfolio Revalued Upwards

As of 30 September 2011, the initial portfolio of 15 properties was revalued upwards, resulting in revaluation gains of S$50.1 million, or an appreciation of 5.9% from the S$851.2 million at the time of the listing. The revaluation gains demonstrates the Managers ability to secure high quality assets at attractive prices. The regulatory annual revaluation exercise was independently conducted by DTZ Debenham Tie Leung (SEA) Pte Ltd(4).
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The expanded Sabana Shariah Compliant REIT portfolio also reects greater asset type diversication. For example, the portfolio allocation to high-tech properties in terms of GFA and property value decreased by approximately 8.0%. The Manager believes that the improved diversification of the Sabana Shariah Compliant REIT portfolio in the areas of asset type, tenant base and industry strengthens the Trusts position to provide Unitholders with stable income distributions. Weighted Average Master Lease Expiry by Gross Revenue (based on initial IPO portfolio)(7)
59.5%
Portfolio Composition
Asset Type by GFA
Initial Portfolio at IPO(9)
High-Tech Industrial 44.0% Chemical Warehouse & Logistics 17.6% Warehouse & Logistics 28.7% General Industrial 9.7%
40.5%
Enlarged Portfolio(10)
2011 2012 2013 2014 2015
Weighted Average Master Lease Expiry by Gross Revenue (based on enlarged portfolio)(8)
49.4% 37.7%
Asset Type by Property Value
9.6% 3.3% 2011 2012 2013 2014 2015 2016
Initial Portfolio at IPO(9)
Enlarged Portfolio(10)
(7) Based on 14 properties that excludes 9 Tai Seng Drive, which is not on master lease. (8) Based on 18 properties that excludes 9 Tai Seng Drive which is not on master lease and 1 Tuas Ave 4. No rentals were collected for 1 Tuas Ave 4 in November and December 2011. The Manager is in advanced stage of negotiation with a party for a 10-year lease for the whole building. The existing Master Lease is set to expire in approximately 23 months. This property constitutes approximately 2.7% of total portfolio value.
(9) Based on 15 properties. (10) Includes the acquisitions of the properties at 6 Woodlands Loop, 39 Ubi Road 1, 3A Joo Koon Circle, 21 Joo Koon Crescent and 2 Toh Tuck Link.
ANNUAL REPORT 2011
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Sub-tenant Diversication(11) by Net Lettable Area
Top 10 tenants by Gross Rental Income for FY2011

Gross Rental Income (%) 41.0%
No. 1
Tenant Subsidiary and jointly controlled entity of City Developments Limited Subsidiaries of Freight Links Express Holdings Limited
Property 151 Lorong Chuan, Singapore 556741 200 Pandan Loop, Singapore 128388 33 & 35 Penjuru Lane, Singapore 609200/609202 18 Gul Drive, Singapore 629468
23.5%
Telecommunication & Data Warehousing 16.1% Chemical 9.0% Electronics 13.0% Engineering 3.9% Food & Beverage 3.1% General Manufacturing Industries 0.6% Healthcare 3.0% Information Technology 7.0% Logistics 19.2% Others 16.4% Research & Development 2.9% Storage 5.8%
51 Penjuru Road, Singapore 609143 218 Pandan Loop, Singapore 128408 30 & 32 Tuas Avenue 8, Singapore 639246/639247 3 4 5 6 7 8 9 10 Utraco Greentech Pte. Ltd. SB (Lakeside) Investment Pte. Ltd. Ho Bee Developments Pte. Ltd. Oxley & Hume Builders Pte. Ltd. DHL Supply Chain Singapore Pte. Ltd. Premier G&U Districenters Pte. Ltd.(12) Fong Tat Motor Co. Pte. Ltd. Savvis Singapore Company Pte. Ltd. 8 Commonwealth Lane, Singapore 149555 34 Penjuru Lane, Singapore 609201 15 Jalan Kilang Barat, Frontech Centre, Singapore 159357 26 Loyang Drive, Singapore 508970 9 Tai Seng Drive, Geo-Tele Centre, Singapore 535227 1 Tuas Ave 4, Singapore 639382 3 Kallang Way 2A, Fong Tat Building, Singapore 347493 9 Tai Seng Drive, Geo-Tele Centre, Singapore 535227 8.3% 7.9% 4.0% 3.8% 2.9% 2.7% 1.8% 1.4%
Number of Sub-tenants
128
92
As at Listing Date
31 Dec 11
(11) Not more than 20.0% of the net lettable area (NLA) of properties is being rented to tenants or sub-tenants in any one single sector.
(12) 1 Tuas Avenue 4 No rentals were collected for November 2011 and December 2011. The Property constitutes approximately 2.7% of total portfolio value. The existing Master Lease is set to expire in approximately 23 months.
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Proactive Asset Management

Within Sabana Shariah Compliant REITs portfolio, 19 of the 20 properties are under master lease arrangements. The Manager has exhibited a keen ability to manage and add value to the portfolio properties. For example, through active marketing and leasing initiatives, the Manager swiftly replaced outgoing tenants at the portfolios multi-tenanted property at 9 Tai Seng Drive. As a result, the fourth quarter of 2011 saw the occupancy rate of the building increase from 96.1% in the rst quarter of 2011 to 98.4%. Overall, a positive rent revision was achieved by the team at about 8.0% for leases concluded, for both new and renewal tenants. In another instance, the original master tenant at Sabana Shariah Compliant REITs portfolio property at 1 Tuas Ave 4 stopped paying rent in November and December 2011. Despite a cautions business environment, the Manager quickly found a replacement tenant and was at the nal stages of concluding the lease at the time of print. Additionally, the Manager is actively engaging the master tenants whose leases are expiring in 2013. This may require conversion of certain properties into multi-tenanted buildings. The Manager is working on early lease renewal with current tenants and is making frequent site visits to understand tenant requirements.
Outlook
Moving forward, the Manager will continue its proactive leasing initiatives, including encouraging early lease renewals, leveraging on our extensive network and reaching out to new tenants and constant engagement with existing tenants for new opportunities. The Manager will also continue to seek yield-accretive acquisitions. Most importantly, the Manager is well-prepared and has the proven hands-on experience to actively manage its portfolio for future growth.
ANNUAL REPORT 2011
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Board of Directors
Ng Shin Ein
Steven Lim Kok Hoong
Muhammad Faishal Bin Ibrahim Khan Surattee
Kevin Xayaraj
Henry Chua Tiong Hock
Mr Steven Lim Kok Hoong

Chairman and Independent Non-executive Director Mr Lim was appointed as the Chairman and Independent Non-executive Director of the Manager on 1 November 2010. He is also a member of the Audit Committee. Mr Lim is currently retired. He was previously a senior partner at Ernst & Young in Singapore where he served as audit partner for various clients and assisted in managing the firm. Prior to his appointment at Ernst & Young, Mr Lim was the Managing Partner of Arthur Andersen in Singapore from 1990 to 2002. He also held
the position of Area Managing Partner Asia Pacific for Audit & Business Advisory Services from 1999 to 2000. In all, Mr Lim has over 32 years of experience working in public accountancy, specialising in auditing companies across a variety of industries. He is also an Independent Director of several publicly listed companies in Singapore and of the Singapore Tourism Board. Mr Lim holds a Bachelor of Commerce degree from the University of Western Australia. He is a member of the Institute of Chartered Accountants in Australia and the Institute of Certified Public Accountants of Singapore.
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Yong Kok Hoon
Mr Kevin Xayaraj
Co-founder, Chief Executive Officer and Executive Director Mr Xayaraj is the Co-founder and Chief Executive Ofcer of the Manager. He is Executive Director of the Manager since 15 March 2010. He has more than 20 years of experience in real estate investment, development and asset management in many property markets. Before joining the Manager, Mr Xayaraj was the Director, Real Estate Investments of TCP from October 2009 to August 2010. Prior to that, Mr Xayaraj was the Senior Manager, Marketing at Cambridge Industrial Property Management Pte. Ltd. from January 2009 to August 2009. Mr Xayaraj was with Cambridge Industrial Trust Management Limited from December 2005 to December 2008 as an Assistant Vice President (Investment). From January 2004 to December 2005, he was involved in the business development and asset management at Ascendas Land (Singapore) Pte. Ltd. for two years. Mr Xayaraj was also a Vice President, Research and Finance at Pacic Star Asset Management Pte. Ltd. from January 2003 to December 2003. He was Assistant Manager, Project & Financial Analysis at Pacic Star Property Management Pte. Ltd. from July 2002 to December 2002. Prior to that, he also held other positions such as Senior Manager (Research) with Jones Lang LaSalle Property Consultants Pte. Ltd. from January 2002 to April 2002, Equities Research Analyst with OUB Securities Pte. Ltd. from July 1999 to March 2001, UOB Investment Research Pte. Ltd. from December 1997 to July 1999 and Tsang & Ong Research (Pte) Ltd from January 1997 to December 1997, and Property Analyst/Valuer at Stewart, Young, Hillesheim & Atlin Ltd in Toronto (Canada) from February 1988 to December 1994. Mr Xayaraj holds a Bachelor of Applied Science (Honours) degree from the University of Windsor and a Master of Business Administration from the Imperial College, University of London.
Mr Yong Kok Hoon

Independent Non-executive Director Mr Yong was appointed as an Independent Nonexecutive Director of the Manager on 1 November 2010. He is also a member of the Nominating and Remuneration Committee and the Chairman of the Audit Committee. Mr Yong has served as Managing Director of InnoTek Limited since 2010, having held key leadership roles in the Singapore Exchange Securities Trading Limited (SGX-ST) listed technology group for 12 years, including as Chief Financial Ofcer and, from 2002, as Executive Director of the InnoTek Group. A Certified Public Accountant and a Fellow of the Association of Chartered Certied Accountants, Mr Yong started his accounting and auditing career with KPMG LLP and subsequently spent more than 10 years in Ernst & Young until 1994 and thereafter, a partner in Moore Stephens, an international accounting rm. Throughout Mr Yongs auditing career which spans over a decade, he also acted as reporting accountant for several significant IPOs and major merger and acquisitions (M&A) transactions. In his foray into the corporate world, Mr Yong took on the position of Group Financial Controller in the listed FMCG group, QAF Ltd, between 1996 and 1999. With a robust background in accounting, auditing, nance and, advisory services, Mr Yong played pivotal roles in M&A transactions, strategic investments and corporate actions to unlock shareholder value. He has brought these capabilities onboard to InnoTek Limited, where he is the key driver for its strategic direction, corporate governance compliance, and risk management & controls. He had also served as a member of the financial statements review committee and was a member of the China Committee of the Institute of Certied Public Accountants of Singapore. He holds a Master of Business Administration degree from the International Management Centre, Europe.
ANNUAL REPORT 2011
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Board of Directors
Associate Professor Muhammad Faishal Bin Ibrahim Khan Surattee

Independent Non-executive Director Associate Professor Muhammad Faishal was appointed as an Independent Non-executive Director of the Manager on 1 November 2010. He is also the Chairman of the Nominating and Remuneration Committee and a member of the Audit Committee. Professor Faishal has been working as an academic at the National University of Singapore since 1996. Prior to joining the National University of Singapore, Professor Faishal was a valuer at the Inland Revenue Authority of Singapore from 1993 to 1996, where he valued properties for taxation purposes, including those relating to property tax, stamp duty and estate duty. In addition, he valued land for the sale of sites by Singapore government agencies. Professor Faishal has been a Member of Parliament since May 2006 and is currently serving Singapores Nee Soon GRC. Professor Faishal holds a Bachelor of Science (Honours) in Estate Management from the National University of Singapore, a Master of Science degree in Real Estate from the National University of Singapore and a Doctor of Philosophy degree in Management Sciences from the University of Manchester Institute of Science and Technology.
ventures, mergers and acquisitions and fund raising exercises. Ms Ng sits on the Boards of NTUC Fairprice Cooperative, Yanlord Land Group Limited, First Resources Limited and Eu Yan Seng International Ltd. Additionally, she is an adjunct research fellow focused on Philanthropy and social enterprises with the Business School of National University of Singapore. Ms Ng holds a Bachelor of Laws degree from the Queen Mary and Westeld College, University of London and a Post Graduate Diploma in Singapore Law from the National University of Singapore.
Mr Henry Chua Tiong Hock

Non-executive Director Mr Chua is a Non-executive Director of the Manager and also a member of the Nominating and Remuneration Committee. He was appointed on 1 November 2010. Mr Chua has worked in Freight Links Group for over 20 year. During his service with Freight Links Group, Mr Chua served in numerous vocations in management and in operations. Mr Chua is currently Executive Director and Chief Corporate Development Ofcer of Freight Links Express Holdings Limited and is responsible for corporate development, investment and properties within the Freight Links Group. Mr Chua is concurrently a Non-executive Director of Freight Management Holdings Berhad, an associate company of Freight Links Express Holdings Limited, which is listed on Bursa Malaysia. Mr Chua also holds the position of Executive Director in a number of other subsidiaries in the Freight Links Group located in Singapore and overseas. Mr Chua holds a Bachelor of Arts degree from the University of Singapore, a Diploma in Personnel Management from the Singapore Institute of Management and Singapore Institute of Personnel Management and a Diploma in Business Administration from the National University of Singapore.
Ms Ng Shin Ein
Non-executive Director Ms Ng Shin Ein was appointed as a Non-executive Director of the Manager on 1 November 2010. She is also a member of the Audit Committee. She is the Regional Managing Director of Blue Ocean Associates Pte. Ltd., a firm focused on private investments in Asia. Prior to this, Ms Ng was with the Singapore Exchange, where she was responsible for developing Singapores capital market by bringing foreign companies to list in Singapore. Additionally, she was part of the Singapore Exchanges Initial Public Offering Approval Committee. Ms Ng started her career as a corporate lawyer in Messrs Lee & Lee, pursuant to her admission as an advocate and solicitor of the Singapores Supreme Court. Whilst in legal practice, she advised on joint
18
Management Team
THE MANAGER SABANA REAL ESTATE INVESTMENT MANAGEMENT PTE. LTD.
Mr Kevin Xayaraj
Co-founder, Chief Executive Ofcer and Executive Director (Refer to the description under the section on the Board of Directors, page 17.)
Mr Aw Wei Been
Chief Operating Officer and Head of Asset Management Mr Aw is the Chief Operating Ofcer and Head of Asset Management of the Manager. He has about 17 years of experience working in the real estate industry. Prior to joining the Manager, Mr Aw was Head of Asset Management at TCP. This was preceded by his role at the Agency for Science, Technology and Research (A*STAR), where he served as Head, Infrastructure Planning and Facilities Management. At A*STAR, Mr Aw was responsible for the development planning of a business park cum high-specication scientic facility known as Fusionopolis Phase 2A. Mr Aw also served as a Senior Manager for Investment at Cambridge Industrial Trust Management Limited from 2007 to 2009, where he sourced and negotiated industrial real estate sale and leaseback deals. From 2005 to 2007, Mr Aw was with Jurong Consultants Pte. Ltd., a wholly-owned subsidiary of JTC Corporation (formerly known as Jurong Town Corporation), where he was the principal planner in the planning department. The role saw him leading and co-leading consultancy projects out of Singapore, in master planning of industrial parks and related areas. Mr Aw began his career in 1995 with JTC Corporation, a statutory board that controls the development and marketing of major industrial estates in Singapore. There, he built up his experience in lease management, land and building development and the marketing of industrial facilities. Mr Aw was at JTC Corporation from May 1995 until February 2005 and last held the position of Manager. Mr Aw graduated with a Bachelor of Science (Honours) degree in Estate Management from the National University of Singapore and holds a Master of Science in Real Estate from the National University of Singapore.
Mr Bobby Tay Chiew Sheng

Co-founder, Chief Strategy Officer and Head of Investor Relations Mr Tay is the Co-founder, Chief Strategy Ofcer and Head of Investor Relations of the Manager. He has more than seven years of experience in investor relations. Prior to joining the Manager, Mr Tay was the Director, Business Development at TCP from October 2009 to August 2010. He also worked with Cambridge Industrial Trust Management Limited as the Manager of the Investor Relations Department from August 2007 to September 2009. Mr Tay was the Manager of Investor Relations at Aztech Group Ltd from April 2007 to August 2007. Prior to joining Aztech Group Ltd, Mr Tay was a Manager of Magnecomp International Limited where he handled media, investor and analyst relations for the company. He worked closely with the companys Chief Executive Officer and Chief Financial Ofcer for the quarterly reporting of results to the board of directors and the nancial market, and produced collateral for investor relations, presentations for analyst briengs and press releases. He also performed market research for mergers and acquisitions and joint venture opportunities, conducted statistical analysis on industry trends and competitors, and business analysis of the companys performance. Mr Tay began his career working as an operations executive for the Peoples Action Party at its headquarters from January 2000 to April 2004. Mr Tay holds a Bachelor of Commerce degree in Management from the University of Western Sydney and a Master of Business Systems degree from Monash University.
ANNUAL REPORT 2011
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Management Team
THE PROPERTY MANAGER SABANA PROPERTY MANAGEMENT PTE. LTD.
Mr How Pui, Ric

Assistant General Manager Mr How joined Sabana Property Management Pte. Ltd. on 5 September 2011 as an Assistant General Manager. He brings with him more than 10 years of experience in property and facilities management which include commercial, industrial and retail properties. Prior to joining Sabana Property Management Pte. Ltd., Mr How was Property Manager for City Developments Limited (CDL) and its subsidiaries, Branbury Investment Limited. During his appointment with CDL, he set up the property and facilities management system for two new developments with a total leasable area of approximately 400,00 sq ft. He also held the appointment of Property Manager at New Tech Park (NTP), which is now one of the Trusts portfolio properties. Mr How played a key role in the upgrading and energy management project in NTP that involved a major chiller system change worth over S$3.0 million, which was completed in September 2010. The project had led to higher operation efciencies and signicant cost savings for development. Separately, NTP was also certied Green Mark GOLD in March 2009. Prior to joining CDL, Mr How worked with Keppel FMO Pte. Ltd. from 2003 to 2006 and held the appointment of Area Manager for Keppel Lands group of commercial development, of which he managed a portfolio of more than 10 properties with over 90 employees with broadbased abilities in strategic planning, cost re-engineering, operations and administration. His prior employment includes CB Richard Ellis Pte. Ltd. from 2002 to 2003 and Davis Langdon & Seah Pte. Ltd. from 1997 to 1998 as a Quantity Surveyor. Mr How began his career in 1996 as Property Ofcer with Far East Organization Pte. Ltd.. Mr How holds a Bachelor of Science (Honours) degree in Building Management from the National University of Singapore.
Ms Tan Chiew Kian

Chief Financial Ofcer Ms Tan is the Chief Financial Ofcer of the Manager. She works closely with the Chief Executive Ofcer and the management team to formulate strategic plans for Sabana Shariah Compliant REIT. She held a number of positions in accounting and nance prior to joining the Manager. Ms Tan was previously the Chief Financial Officer for Singapore Medical Group Limited from February 2008 to March 2011, where she was responsible for the Groups nance, tax, treasury, audit, investments and other matters that relate to the Groups listing on Singapore Exchange Securities Trading Limited (SGXST). From 2006 to 2008, Ms Tan was Chief Financial Ofcer for Toll Logistics (Asia) Limited (formerly known as Sembawang Kimtrans Ltd), Southeast Asias leading integrated logistics service provider, where she held a similar portfolio. Ms Tan started her accounting career at JTC Corporation as an Accountant and took on the role as Finance Manager for CapitaLand Commercial Limited from 2001 to 2005. Ms Tan holds a Master of Business Administration from Nanyang Technological University and a CIMA Diploma in Islamic Finance. She is a Certied Public Accountant and Accredited Tax Practitioner (Income Tax) of Singapore, and member of the Institute of Certied Public Accountants of Singapore and Singapore Institute of Accredited Tax Professionals Limited.
20
THE SABANA TEAM
Front row from left: Bobby Tay Chiew Sheng Tan Chiew Kian Kevin Xayaraj How Pui, Ric Aw Wei Been
Back row from left: Loh Yee Hui Maynard Wee Lim Tze Wei Abdul Jalil Bin Mohd Noor Angel Goh Siti Hawa Binte Ahmad Agnes Chan Eric Ng Grace Chen Khoo Kian Teck Carin Tan Chan Yong Han Yvonne Lee Amelia Seah Jennifer Lim Albert Tan
ANNUAL REPORT 2011
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The Manager
SABANA REAL ESTATE INVESTMENT MANAGEMENT PTE. LTD.
Front row from left: Bobby Tay Chiew Sheng, Co-founder, Chief Strategy Ofcer and Head of Investor Relations Tan Chiew Kian, Chief Financial Ofcer Kevin Xayaraj, Co-founder, Chief Executive Ofcer and Executive Director Aw Wei Been Chief Operating Ofcer & Head of Asset Management
Back row from left: Lim Tze Wei, Senior Manager (Asset Management) Angel Goh, Assistant Manager (Human Resource) Siti Hawa Binte Ahmad, Executive (Asset Management) Agnes Chan, Admin Executive Grace Chen, Manager (Investor Relations) Khoo Kian Teck, Senior Finance Manager Chan Yong Han, Compliance Ofcer Amelia Seah, Manager (Asset Management) Jennifer Lim, Accountant
22
The Property Manager
SABANA PROPERTY MANAGEMENT PTE. LTD.
Front row from left: Bobby Tay Chiew Sheng, Director of SPM How Pui, Ric, Assistant General Manager Kevin Xayaraj, Director of SPM Henry Chua Tiong Hock, Director of SPM Aw Wei Been, Chief Operating Ofcer and Head of Asset Management of the Manager
Back row from left: Maynard Wee, Senior Property Manager Carin Tan, Accounts Executive Abdul Jalil Bin Mohd Noor, Senior Property Manager Loh Yee Hui, Finance Manager Eric Ng, Property Manager Yvonne Lee, Admin Executive Albert Tan, Property Executive
ANNUAL REPORT 2011
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BEY ND BOUNDARIES
3,998,796 sq ft
+21.7% since IPO Total GFA of Portfolio
24
Property Locations
20
11 1 14 17 8 7 6 13 4 2 5 19 9 10 15 12 2 18 8 16 3
High-tech Industrial
High specifications industrial mixed-use space suitable for businesses such as multimedia manufacturing, data centre operations and precision engineering.
1 2 3 4 5
151 Lorong Chuan 8 Commonwealth Lane 9 Tai Seng Drive 200 Pandan Loop 15 Jalan Kilang Barat
Chemical Warehouse & Logistics

Specialised warehouses built to strict legal specifications to accommodate highly regulated chemicals and goods.
6 7 8
33 & 35 Penjuru Lane 18 Gul Drive 1 Tuas Avenue 4
Warehouse & Logistics

General warehouses comprising loading and unloading facilities intended for the storage and distribution of goods and merchandise.
9 10 11 12 13 14 15
34 Penjuru Lane 51 Penjuru Road 26 Loyang Drive 3 Kallang Way 2A 218 Pandan Loop 3A Joo Koon Circle 2 Toh Tuck Link
General Industrial
Warehouses and manufacturing facilities equipped with a broad range of functions for mixed usage.
16 17 18 19 20
123 Genting Lane 30 & 32 Tuas Avenue 8 39 Ubi Road 1 21 Joo Koon Crescent 6 Woodlands Loop
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Property Portfolio
151 Lorong Chuan
8 Commonwealth Lane
9 Tai Seng Drive
Location 151 Lorong Chuan, New Tech Park Singapore 556741 Description A 6-storey industrial building with a ground level carpark Purchase consideration (S$ million) 305.9 Latest valuation (S$ million) (as of 30 September 2011) 331.9 Gross rental income for period ended 31 December 2011 (S$ million) 26.3 Occupancy rate (%) 100.0 Land lease expiry 2055 45 yrs wef 26 Nov 2010 Seller Branbury Investments Ltd GFA (sq ft) 810,710
Location 8 Commonwealth Lane Singapore 149555 Description A 4-storey light industrial & a 6-storey annex Purchase consideration (S$ million) 70.3 Latest valuation (S$ million) (as of 30 September 2011) 73.5 Gross rental income for period ended 31 December 2011 (S$ million) 6.0 Occupancy rate (%) 100.0 Land lease expiry 2059 30 + 23 yrs wef 1 Feb 2006 Seller Utraco Greentech Pte. Ltd. GFA (sq ft) 161,815
Location 9 Tai Seng Drive, Geo-Tele Centre Singapore 535227 Description A 6-storey building with a basement carpark Purchase consideration (S$ million) 46.3 Latest valuation (S$ million) (as of 30 September 2011) 46.6 Gross rental income for period ended 31 December 2011 (S$ million) 6.1 Occupancy rate (%) 98.4 Land lease expiry 2055 30 + 30 yrs wef 1 Jun 1995 Seller Geo-Tele Pte. Ltd. GFA (sq ft) 218,905
26
200 Pandan Loop
15 Jalan Kilang Barat
Location 200 Pandan Loop, Pantech 21 Singapore 128388 Description An 8-storey industrial building including a basement carpark Purchase consideration (S$ million) 41.5 Latest valuation (S$ million) (as of 30 September 2011) 46.5 Gross rental income for period ended 31 December 2011 (S$ million) 3.5 Occupancy rate (%) 100.0 Land lease expiry 2083 99 yrs wef 27 Jan 1984 Seller Eccott Pte Ltd GFA (sq ft) 180,186
Location 15 Jalan Kilang Barat, Frontech Centre Singapore 159357 Description A 8-storey industrial building with a multi-storey carpark at levels 2 & 3 Purchase consideration (S$ million) 34.5 Latest valuation (S$ million) (as of 30 September 2011) 36.0 Gross rental income for period ended 31 December 2011 (S$ million) 2.9 Occupancy rate (%) 100.0 Land lease expiry 2061 99 yrs wef 1 Jan 1962 Seller Ho Bee Developments Pte Ltd GFA (sq ft) 73,928
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Property Portfolio
33 & 35 Penjuru Lane
18 Gul Drive
1 Tuas Avenue 4
Location 33 & 35 Penjuru Lane, Freight Links Express Logisticpark Singapore 609200/609202 Description Comprising three buildings, including a single storey warehouse with mezzanine floor, a 4-storey warehouse and a part single-storey/part 3-storey warehouse with a basement Purchase consideration (S$ million) 78.9 Latest valuation (S$ million) (as of 30 September 2011) 82.6 Gross rental income for period ended 31 December 2011 (S$ million) 6.9 Occupancy rate (%) 100.0 Land lease expiry 2049 30 + 31 yrs wef 16 Feb 1988 Seller Freight Links Express Logisticpark Pte Ltd GFA (sq ft) 286,192
Location 18 Gul Drive Singapore 629468 Description A part 2/part 4-storey single-user warehouse
Location 1 Tuas Avenue 4 Singapore 639382 Description A 3-storey part automated/part general industrial chemical warehouse building with a surface carpark
Purchase consideration (S$ million) 34.1 Latest valuation (S$ million) (as of 30 September 2011) 35.3 Gross rental income for period ended 31 December 2011 (S$ million) 3.1 Occupancy rate (%) 100.0 Land lease expiry 2038 13 yrs 10 mths + 12 days + 20 yrs wef 1 Nov 2004 Seller LTH Logistics (Singapore) Pte Ltd GFA (sq ft) 132,878
Purchase consideration (S$ million) 28.0 Latest valuation (S$ million) (as of 30 September 2011) 28.6 Gross rental income for period ended 31 December 2011 (S$ million) 2.0 Occupancy rate (%) -(1) Land lease expiry 2047 30 + 21 yrs 4 mths wef 1 Jan 1996 Seller Premier G & U Districenters Pte. Ltd.(1) GFA (sq ft) 160,361
(1) 1 Tuas Avenue 4 No rentals were collected for November 2011 and December 2011. The Manager is in advanced stage of negotiation with a party for a 10-year lease for the whole building. The existing Master Lease to expire in approximately 23 months. The Property constitutes approximately 2.7% of total portfolio value.
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34 Penjuru Lane
51 Penjuru Road
26 Loyang Drive
Location 34 Penjuru Lane, Penjuru Logistics Hub Singapore 609201 Description A 5-storey single user warehouse with ancillary offices
Location 51 Penjuru Road Freight Links Express Logisticentre Singapore 609143 Description A 4-storey purpose built warehouse building
Location 26 Loyang Drive Singapore 508970 Description A single-storey building with mezzanine floors
Purchase consideration (S$ million) 60.0 Latest valuation (S$ million) (as of 30 September 2011) 62.0 Gross rental income for period ended 31 December 2011 (S$ million) 5.7 Occupancy rate (%) 100.0 Land lease expiry 2032 30 yrs wef 16 Aug 2002 Seller SB (Lakeside) Investment Pte. Ltd. GFA (sq ft) 414,270
Purchase consideration (S$ million) 42.5 Latest valuation (S$ million) (as of 30 September 2011) 45.2 Gross rental income for period ended 31 December 2011 (S$ million) 3.7 Occupancy rate (%) 100.0 Land lease expiry 2055 30 + 30 yrs wef 1 Jan 1995 Seller Freight Links Express Logisticentre Pte Ltd GFA (sq ft) 246,376
Purchase consideration (S$ million) 32.0 Latest valuation (S$ million) (as of 30 September 2011) 33.6 Gross rental income for period ended 31 December 2011 (S$ million) 2.8 Occupancy rate (%) 100.0 Land lease expiry 2054 30 + 18 yrs 1 Jan 2006 Seller Oxley & Hume Builders Pte. Ltd. GFA (sq ft) 149,166
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Property Portfolio
3 Kallang Way 2A
218 Pandan Loop
3A Joo Koon Circle
Location 3 Kallang Way 2A, Fong Tat Building Singapore 347493 Description A 7-storey building with basement carpark and ancillary offices
Location 218 Pandan Loop Singapore 128408 Description A 2-storey office building and a singlestorey cold room warehouse with mezzanine floor
Location 3A Joo Koon Circle Singapore 629033 Description A 2-storey building with mezzanine floor and a 3-storey factory building
Purchase consideration (S$ million) 15.0 Latest valuation (S$ million) (as of 30 September 2011) 15.5 Gross rental income for period ended 31 December 2011 (S$ million) 1.3 Occupancy rate (%) 100.0 Land lease expiry 2055 30 + 30 yrs wef 1 May 1995 Seller Fong Tat Motor Co. Pte. Ltd. GFA (sq ft) 83,646
Purchase consideration (S$ million) 13.5 Latest valuation (S$ million) (as of 30 September 2011) 13.9 Gross rental income for period ended 31 December 2011 (S$ million) 1.2 Occupancy rate (%) 100.0 Land lease expiry 2049 30 + 30 yrs wef 16 Sept 1989 Seller Freight Links Express Air Systems Pte Ltd GFA (sq ft) 50,374
Purchase consideration (S$ million) 40.3 Latest valuation (S$ million) (as of 30 September 2011) 40.3(2) Gross rental income for period ended 31 December 2011 (S$ million) 0.3 Occupancy rate (%) 100.0 Land lease expiry 2047 30 + 30 yrs wef 1 Aug 1987 Seller Ringford Pte. Ltd. GFA (sq ft) 217,899
(2) Date of valuation on 15 Aug 2011.
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2 Toh Tuck Link
123 Genting Lane
30 & 32 Tuas Avenue 8
Location 2 Toh Tuck Link Singapore 596225 Description A 6-storey warehouse
Location 123 Genting Lane, Yenom Industrial Building Singapore 349574 Description An 8-storey building with ancillary offices
Location 30 & 32 Tuas Ave 8 Singapore 639246 / 639247 Description Comprising two original E8 JTC standard factories with an adjoining 4-storey purpose-built factory with ancillary offices
Purchase consideration (S$ million) 40.1 Latest valuation (S$ million) (as of 30 September 2011) 40.1(2) Gross rental income for period ended 31 December 2011 (S$ million) 0.3 Occupancy rate (%) 100.0 Land lease expiry 2056 30 + 30 yrs wef 16 Dec 1996 Seller Winfred Pte. Ltd. GFA (sq ft) 181,705
Purchase consideration (S$ million) 24.5 Latest valuation (S$ million) (as of 30 September 2011) 25.1 Gross rental income for period ended 31 December 2011 (S$ million) 2.2 Occupancy rate (%) 100.0 Land lease expiry 2041 60 yrs wef 1 Sept 1981 Seller Yenom Industries Pte Ltd GFA (sq ft) 158,907
Purchase consideration (S$ million) 24.0 Latest valuation (S$ million) (as of 30 September 2011) 25.0 Gross rental income for period ended 31 December 2011 (S$ million) 2.1 Occupancy rate (%) 100.0 Land lease expiry 2056 30 + 30 yrs wef 1 Sept 1996 Seller Freight Links Fabpark Pte. Ltd. GFA (sq ft) 158,846
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Property Portfolio
21 Joo Koon Crescent
39 Ubi Road 1
6 Woodlands Loop
Location 21 Joo Koon Crescent Singapore 629026 Description An 8-storey light industrial building with ancillary office Purchase consideration (S$ million) 20.3 Latest valuation (S$ million) (as of 30 September 2011) 20.3(3) Gross rental income for period ended 31 December 2011 (S$ million) 0.2 Occupancy rate (%) 100.0 Land lease expiry 2054 30 + 30 yrs wef 16 Feb 1994 Seller AVA Global Pte. Ltd. GFA (sq ft) 99,575
Location 39 Ubi Road 1 Singapore 408695 Description A 3-storey factory building with ancillary office Purchase consideration (S$ million) 32.0 Latest valuation (S$ million) (as of 30 September 2011) 32.0(4) Gross rental income for period ended 31 December 2011 (S$ million) 0.2 Occupancy rate (%) 100.0 Land lease expiry 2052 30 + 30 yrs wef 1 Jan 1992 Seller Ascend Group Pte. Ltd. GFA (sq ft) 135,513
Location 6 Woodlands Loop Singapore 738346 Description A 3-storey general industrial building Purchase consideration (S$ million) 14.8 Latest valuation (S$ million) (as of 30 September 2011) 14.8(5) Gross rental income for period ended 31 December 2011 (S$ million) 0.1 Occupancy rate (%) 100.0 Land lease expiry 2054 30 + 30 yrs wef 16 Sept 1994 Seller Winstant & Co Pte Ltd GFA (sq ft) 77,544
(3) Date of valuation on 25 Aug 2011. (4) Date of valuation on 5 Aug 2011. (5) Date of valuation on 21 Sep 2011.
32
Independent Market Study

by DTZ Debenham Tie Leung (SEA) Pte Ltd
1.0 Economic Overview

1.1 Gross Domestic Product Growth Singapores economy performed relatively well in 2011, given the high Gross Domestic Product (GDP) growth of 14.5% in 2010, supply-side disruptions from the March 2011 Japan earthquake and the subsequent Fukushima nuclear fallout, a downgrade in the US credit ratings in August 2011, as well as a reduction in spending due to the unfolding of the Eurozone debt crisis. Advance estimates from the Ministry of Trade and Industry in January 2012 indicate that real GDP growth for Singapore in 2011 was 4.8% (Figure 1.1). Figure 1.1 Real GDP Growth and Ination Rate
Real GDP Growth (%) 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F
Activity in Singapores manufacturing and trade-related sectors is likely to be weaker in 2012. While the MTI envisages some pickup in the economy in H2 2012, overall GDP growth in 2012 is expected to be modest, at 1% to 3%(1). 1.2 Ination Singapores ination, as measured by the Consumer Price Index (CPI), was 5.2% in 2011, higher than the 2.8% in 2010. Given the modest economic growth forecast for 2012, the MAS expects ination to be about 2.5% to 3.5% in 2012. 1.3 Sectoral Performance Singapores manufacturing sector is an important demand driver of factory space and constitutes a signicant portion of the economy. The manufacturing sector grew by 6.9%(2) in 2011, a marked slowdown from the 29.7% growth in 2010 (Table 1.1). This was due in part to the Japan earthquake and the oods in Thailand disrupting the supply chain, causing a reduction in output, especially in the electronics industry cluster. There was also a pull-back in the growth of biomedical manufacturing cluster in H2 2011. This was further exacerbated by the sluggish US economy and the Eurozone debt crisis, resulting in weak manufacturing performance overall. The transport and storage sector has enjoyed steady growth. The sector grew between 4.2 4.9 % yearon-year (YOY) in the rst three quarters of 2011, a testament to the contribution of Singapores logistics industry to the economy. Conversely, the YOY growth of the wholesale and retail trade sector has been contracting since 2Q 2010. This indicates that the logistics industry will likely assume a greater role in the demand for warehouse space.
-2.0
Real GDP Growth Ination Rate Average GDP Growth between 2002 and 2011:6.3% Average Ination Rate between 2002 and 2011:2.1%
Source: MTI, MAS, Oxford Economics, DTZ Consulting, February 2012
Table 1.1 Growth Rates of Sectors Driving the Industrial Property Market
Sectors (At 2005 Market Prices) 2010 YOY % Change 1Q 2Q 3Q 4Q 1Q 2011 YOY % Change 2Q 3Q 4Q
Manufacturing 37.2 Transport and Storage Wholesale and Retail Trade 16.9 18.9 6.6 45.2
29.7 13.7 6.0 8.5 15.1 14.4 10.8 5.0 0.2 5.2 3.8 4.9 4.4 25.5 15.8 -6.0
6.9 -
(2)
13.4 4.2 -0.2
6.52 -
Source: MTI, DTZ Consulting, February 2012 (1) The GDP growth forecast from MTI does not factor in downside risks to growth, such as an exacerbation of the Eurozone debt crisis and a signicant slowdown in Chinas economy. Accordingly, Singapores economic performance in 2012 will come in lower than expected, should these risks materialise. (2) Advance estimates.
ANNUAL REPORT 2011
33

1.4 Investment Commitments Though investment commitments in Singapore continued to grow, they advanced at a slower pace due to the global economy. Fixed Asset Investments(3) (FAI), a key indicator of manufacturing investments, grew by 6.2% from $12.9 billion(4) in 2010 to $13.7 billion in 2011, in line with previous forecasts ($12.0 to $14.0 billion). Total Business Spending(5) (TBS) also rose, albeit less signicantly, by 1.4% from $7.2 billion in 2010 to $7.3 billion in 2011. The overall value-added that is expected to be generated grew by $1.1 billion to $15.5 billion in 2011, up from $14.4 billion in 2010 (Figure 1.2). This represents a 7.6% increase from 2010. For the goodsproducing industries, the biomedical manufacturing sector is expected to make the largest contribution at $3.0 billion in 2011. This is followed by the electronics sector, at $2.0 billion. In addition, the value-added from the biomedical manufacturing sector increased the most significantly, from $0.6 billion in 2010 to $3.0 billion in 2011. Figure 1.2 Value-Added Expected to be Generated by Industry
$15.5 billion $14.4 billion $12.5 billion
In the goods producing industries, the value-added for the transport engineering, general manufacturing and logistics industries contracted in 2011 due to the effects of the March 2011 Japan earthquake, Thailand oods, and Eurozone debt crisis. This in turn affected trade-related services such as warehousing and air cargo distribution. The government is cautiously optimistic about the investment outlook for 2012, with expectations that investment commitments in 2012 will be sustained at 2011 levels. FAI is expected to grow by up to 9.5% to about $13.0 to $15.0 billion in 2012, reecting the continued strong investment momentum resulting from long-term strategic investments, particularly in petrochemical cracker projects. 1.5 Government Policies and Strategies in 2011
1.5.1 Budget 2011 Budget 2011, announced in February 2011, built on the mid-term expansionary policy agenda in Budget 2010. It included one-off and longer-term measures across three broad categories: Boosting skills and productivity included tax benets, grants and training subsidies for companies and workers to deepen their skills and expertise; Enhancing companies growth capabilities included measures to help companies commercialise their Research & Development (R&D) and expand abroad; and Social investments benefitting households initiatives were introduced to improve the softer aspects of the quality of life in Singapore and make growth more inclusive. 1.5.2 Conditions for New Developments Under Industrial Government Land Sales MTI introduced new conditions for industrial developments, effective 1 January 2012, to better meet the needs of users of ready-built industrial space. The conditions are as follows(6): For selective sites near MRT stations or as decided by the Government, strata subdivision of industrial development is not allowed for a period of 10 years from the date of the issue of Temporary Occupation Permit (TOP). If the successful tenderer decides to strata subdivide the development upon expiry of the 10-year period, the GFA comprised in a single strata unit should not be less than 150 sq m;
2009
2010
2011
Infocomms and Media Healthcare Services Education Logistics Engineering and Environmental Services HQ and Professional Services General Manufacturing Transport Engineering Precision Engineering Chemicals Electronics Biomedical Manufacturing
Source: EDB, DTZ Consulting, February 2012
(3) FAI refers to capital investments in facilities, equipment and machinery. (4) All currencies are in Singapore dollars. (5) TBS refers to a companys annual operating expenditure when the project is fully implemented. The major components include wages, depreciation and rental. (6) Source: MTI Press Release, 29 December 2011.
34
For multi-user industrial developments, the GFA comprised in a single unit shall not be less than 150 sq m. If the successful tenderer decides to strata subdivide the development, the GFA comprised in a single strata unit should also not be less than 150 sq m; For multi-storey industrial developments(7), based on the maximum permissible GFA of the land parcel, the following number of goods lifts (with minimum loading capacity of 2.5 tons and minimum lift car size of 2 m x 3 m), and loading bays are to be provided (Table 1.2); and
2.0 Overview of Singapore Industrial Property Market

2.1 2011 Highlights Major highlights in Singapores industrial property market in 2011 are mainly from JTC Corporation (JTC), which include: Completion of Phases 1 and 2 of the Seletar Aerospace Park (SAP), a 300-ha aerospace hub and the commencement of Phase 3 in 2012; Completion of JTCs second phase of its divestment exercise of 21 blocks of flatted factories and amenities (more than 3.3 million sq ft (300,000 sq m) for a total of $688.6 million; Development of the 13-ha Offshore Marine Centre (OMC), comprising multiple-user industrial infrastructure and facilities catering to offshore and marine industries at Tuas. It is expected to be fully operational by January 2012; Development of the Singapore Innovation Centre (344,500 sq ft) at Biopolis, which is expected to complete in 2013; Commencement of the rst phase of Stolthaven Terminals at Jurong Island, a $350 million petrochemical tankfarm of Stolt-Nielsen, alongside the continuation of Jurong Islands version 2.0 initiative; and Launching of Unilevers plans to develop a Global Leadership Development Centre, its rst corporate university in Asia at LINK@Nepal Hill, which is envisioned to be another landmark at one-north; Announcement of the plans for the development of Biopolis Phase 5, which will provide about 0.5 million sq ft of research space equipped with Shell-plus feature that allow biomedical companies to save resources when setting up their facilities; and Announcement of the removal of the 100% subletting relief measure for JTC tenants and the reinstatement of the 50% subletting cap, with effect from 1 January 2012. In particular, the government has indicated that it will keep monitoring the industrial property market and has signalled that it will release more industrial land through the industrial Government Land Sales (GLS) programme and implement other measure as needed, to ensure that the industrial property market remains stable and sustainable.
Table 1.2 Minimum Provision of Goods Lift and Loading Bay for Multi-storey Industrial Developments from January 2012
Maximum Permissible GFA of Land Parcel Technical Conditions
< 10,000 sq m 10,000 30,000 sq m > 30,000 sq m
Minimum 1 goods lift and 1 loading bay Minimum 2 goods lifts and 2 loading bays Minimum 3 goods lifts and 3 loading bays
Source: MTI
The units in the development shall comply with technical specications of minimum oor loading of 7.5 kN/ sq m, minimum oor-to-ceiling height of 4.0 m, and minimum electrical provision of 160 VA/sq m.
1.5.3 Residential Property Measures The government released a slew of residential cooling measures in January and December 2011. The measures include: Increase in Sellers Stamp Duty rates and holding period; Reduction in loan-to-value limit for non-individuals and individuals with outstanding housing loans; and Additional Buyers Stamp Duty imposed on certain categories of residential property purchases.
(7) This applies to all high-rise industrial developments, regardless of whether it is a single- or multiuser development.
ANNUAL REPORT 2011
35

2.2 Existing Stock in the Industrial Market As at Q4 2010, Singapore has 413.1 million sq ft(8) of private and public industrial space, comprising multipleuser factory (23%, 93.1 million sq ft), single-user factory (55%, 228.2 million sq ft), business parks (4%, 15.2 million sq ft) and warehouse (19%, 76.6 million sq ft) spaces (Figure 1.3). Figure 1.3 Breakdown of Industrial Stock (2011)(9)
About 13% (54.9 million sq ft) of total industrial space is owned by the public sector, for example by government statutory boards such as URA, JTC and Housing Development Board (HDB). However, public industrial stock has been decreasing due to the divestment by JTC. The remaining 87% (358.2 million sq ft) of total industrial space in Singapore is owned by the private sector. The majority 79% of the total industrial space comprises factory space and 21% warehouse space. Private warehouse space also constitutes 99% of total warehouse space in Singapore. Majority of private factory (42%) and warehouse space (59%) is located in the West Region (Table 1.3) (Please see Appendix 1 for map of regions). Table 1.3 Breakdown of Industrial Space in Singapore by Ownership and Region(9)
Region (%) Private Factory Million (%) sq ft Public Factory Private Warehouse Public Warehouse Million sq ft
Private Warehouse 74.4 million sq ft 18% Public Warehouse 0.5 million sq ft 0.1% Private Multiple-user Factory 72.2 million sq ft 18% Public Multiple-user Factory 18.1 million sq ft 4% Private Single-user Factory 187.9 million sq ft 47% Public Single-user Factory 36.7 million sq ft 9% Private Business Park 12.3 million sq ft 3% Public Business Park 2.8 million sq ft 1%
Source: Urban Redevelopment Authority (URA), DTZ Consulting, February 2012
Million (%) sq ft
Million (%) sq ft
Central East North East North West Total
21 13 8 17 42 100
58.3 36.5 21.8 46.7 118.8
21 15 9 12 42
11.6 8.4 5.1 6.3 23.0
18 13 5 6 59
13.4 10.2 3.6 4.2 44.7
83 15 0 0 0
0.4 0.1 0.0 0.0 0.0 0.5
282.1 100
54.4 100
76.1 100
Source: URA, DTZ Consulting, February 2012
(8) All existing supply are in NLA. (9) Figures in this report may not add up due to rounding off.
36
3.0
Private Factory Space
3.1 Existing Supply Total private factory stock increased by 3.6% (9.7 million sq ft) from 272.4 million sq ft in 2010 to 282.1 million sq ft in 2011. This was higher compared to the increase in 2010 (7.3 million sq ft), but lower than the increase in 2009 (14.0 million sq ft). The major new factory completions are summarised in Table 1.4. Table 1.4 Major Private Factory Developments Completed (2011)
Developer/Development Type Location Planning Region NLA (sq ft)
Q1 2011 Amnios and Synapse (Biopolis Phase 3) Trivex Zervex Rolls-Royce Singapore Pte. Ltd. (engine test facility building) Tuas Cove Industrial Centre ExxonMobil Chemical Asia Pacic Pte. Ltd. Q2 2011 Woodlands BizHub Rolls-Royce Singapore Pte. Ltd. (assembly and R & D building) Sysland Pte. Ltd. Dril-Quip Asia Pacic Pte. Ltd. Q3 2011 UB. One Toll Offshore Petroleum Services Pte. Ltd. West Point Bizhub Q4 2011 Singapore Rening Company Pte. Ltd. Grundfos (Singapore) Pte. Ltd. Single-user factory Single-user factory Merlimau Road Shipyard Road West West 233,600 152,800 Multiple-user factory Multiple-user factory Multiple-user factory Ubi Avenue 4 25 Loyang Crescent Tuas South Avenue 2 Central East West 199,100 432,700 369,200 Multiple-user factory Single-user factory Woodlands Industrial Park E5 Seletar Aerospace Park North North-east 471,500 270,200 Business park Multiple-user factory Multiple-user factory Single-user factory Biopolis Drive Burn Road Ubi Road 2 Seletar Aerospace Rise Central Central Central North-east 306,800 195,900 201,300 70,000
Multiple-user factory Single-user factory
Tuas South Avenue 1 Jurong Island Highway
West West
244,300 89,300
Single-user factory Single-user factory
Tuas Bay Drive Tuas South Avenue 1
West West
688,900 199,100
ANNUAL REPORT 2011
37

Private factory stock as at end 2011 comprised approximately 28% (78.5 million sq ft) multiple-user factory space, 68% (191.1 million sq ft) single-user factory space, and 4% (12.5 million sq ft) business park space. Multiple-user factory space made up the bulk of the factory completions in 2011, with 6.3 million sq ft of space being added to the total private factory stock in 2011. 3.2 Potential Supply(11) According to the URA, about 42.9 million sq ft(12) of private factory space is in the pipeline as at Q4 2011. Some 62% (26.7 million sq ft) is under construction while the remaining 38% (16.2 million sq ft) is being planned. Majority of the potential private factory supply is expected to complete in 2012 (45%, 19.4 million sq ft) (Figure 1.4).
Figure 1.4 Potential Supply of Private Factory Space by Development Status(13) and Expected Year of Completion
000 sq ft (GFA) 25,000 20,000 15,000 10,000 5,000 0 2012 2013 2014 2015 2016 >2016
Under Construction
Planned
Some major private factory developments which will be completing in 2012 are listed in Table 1.5. Table 1.5 Major Private Factory Developments Completing (2012)
Developer/ Development Type Location Planning Region NLA (sq ft)
Hyux Innovation Centre Foodaxis @ Senoko
Multiple-user factory Boon Keng Road/ Bendemeer Road Multiple-user factory Senoko Avenue Neythal Road Tuas South Avenue 5 Liu Fang Road/ Wan Shih Road
Central North West West West
467,500 466,700 539,700 254,600 470,200
Manufacture Element Pre Single-user factory Fabricate Pte. Ltd. Sinopec Lubricant (S) Pte. Ltd. Single-user factory Norsun Singapore Pte. Ltd. Single-user factory
(11) All potential supply is in GFA. (12) Includes all private factory space in the pipeline, regardless of size or planning status. (13) Includes the supply from new development and redevelopment projects with provisional and written permission as well from other categories of supply e.g. (i) projects with Outline Provisional Permission, (ii) developments submitted for planning approval and which are under consideration, (iii) projects on awarded GLS sites for which plans have not been submitted for planning approval, (iv) planned projects in the GLS programme (which refer to sites on the GLS conrmed list and sites on the GLS reserve list that have been triggered), and (v) planned public developments for which plans have not been submitted to URA for planning approval.
38
3.3 Government Land Sales To ensure that Singapores industrial property market remains affordable and sustainable, the government will be releasing more land in H1 2012 industrial GLS programme to meet demand for industrial space. A total of 16 sites have been placed in the conrmed list, and 12 sites have been placed in the reserve list. In total, 23.97 ha of land will be available (Table 1.6). Table 1.6 Industrial GLS Programme (H1 2012)
Location Site Area (ha) Zoning Gross Plot Ratio Tenure (years) Estimated Available Date
Confirmed List Mandai Link Serangoon North Avenue 4 (Parcel 1) (previously in reserve list) Tai Seng Link Plot 7, off Tuas South Avenue 12 Plot 9, off Tuas South Avenue 12 Plot 11, off Tuas South Avenue 12 Plot 13, off Tuas South Avenue 12 Plot 15, off Tuas South Avenue 12 Plot 17, off Tuas South Avenue 12 Plot 25, off Tuas South Avenue 12 Plot 27, off Tuas South Avenue 12 Plot 3, Tampines Industrial Crescent Aljunied Road / Sims Drive (previously in reserve list) Kaki Bukit Road 5 / Kaki Bukit Avenue 6 Bukit Batok Street 23 Yishun Avenue 9 (Parcel 5) (previously in reserve list) Reserve List Yishun Avenue 9 (Parcel 6) (previously in reserve list) Tai Seng Street Plot 8, off Tuas South Avenue 12 Plot 10, off Tuas South Avenue 12 Plot 12, off Tuas South Avenue 12 Plot 14, off Tuas South Avenue 12 Plot 16, off Tuas South Avenue 12 Plot 18, off Tuas South Avenue 12 Plot 26, off Tuas South Avenue 12 Plot 30, off Tuas South Avenue 12 Plot 31, off Tuas South Avenue 12 Plot 32, off Tuas South Avenue 12
Source: MTI, DTZ Consulting, February 2012
2.2 0.8 0.43 0.46 0.3 0.3 0.46 0.3 0.3 0.57 0.5 3.88 0.63 1.29 1.5 1.99
B2 B1 B2 B2 B2 B2 B2 B2 B2 B2 B2 B2 B1 B2 B1 B1
2.5 2.5 2.5 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.7 2.5 1.4 2.5 2.5
58 60 30 19 19 19 19 19 19 19 19 60 60 30 60 60
Already available Already available Apr 2012 Jun 2012 Jun 2012 Jun 2012 Jun 2012 Jun 2012 Jun 2012 Jun 2012 Jun 2012 Jun 2012 Feb 2012 Apr 2012 Jun 2012 Jun 2012
1.17 1.17 0.3 0.3 0.46 0.3 0.3 0.46 1.01 0.86 0.86 0.87
B1 B2-W B2 B2 B2 B2 B2 B2 B2 B2 B2 B2
2.5 3.5 [B2-2.5] 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
60 58 19 19 19 19 19 19 19 19 19 19
Already available Feb 2012 Jun 2012 Jun 2012 Jun 2012 Jun 2012 Jun 2012 Jun 2012 Jun 2012 Jun 2012 Jun 2012 Jun 2012
ANNUAL REPORT 2011
39

3.4 Demand and Occupancy Annual demand for private factory space over the past decade averaged 7.8 million sq ft, while average annual supply for the same period was 8.3 million sq ft. Demand for private factory space has consistently been healthy despite the apparent fall in demand in 2009. This apparent fall was due to annual supply and annual demand in 2008 being much higher than normal. Annual demand for private factory space in 2011 was 10.9 million sq ft, while annual supply was 9.7 million sq ft (Figure 1.5). Figure 1.5 Annual Supply, Demand and Occupancy of Islandwide Private Factory Space
000 sq ft (NLA) 25,000 % 93 92 20,000 91 90 89 10,000 88 87 86 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 85
Figure 1.6 Occupancy by Factory Type

Occupancy % 100 95 90 85 80 75 70 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 % 40 30 20 10 1.00 0.50 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 0 -10 -20
Single-user Factory Multiple-user Factory Business Park

15,000
5,000
3.5 Multiple-user Median Rents Median rents for private multiple-user factory space in 2011 surpassed its previous peak of $1.73 per sq ft per month in Q3 2008, reaching $1.78 per sq ft per month in Q1 2011, buoyed by exuberant economic growth in 2010. Median rents have increased 16.2% from $1.64 per sq ft per month in 2010 to reach $1.91 per sq ft per month in 2011 (Figure 1.7). Figure 1.7 Median Rents for Private Multiple-user Factory Space
$ per sq ft per month 2.50 2.00 1.50
Annual Supply (LHS) (sq m) Annual Demand (LHS) (sq m) Occupancy (RHS) Average Annual Supply between 2002 and 2011: 8.3 million sq ft Average Annual Demand between 2002 and 2011: 7.8 million sq ft
Occupancy rates for private factory space have also been consistently healthy, posting more than 90% overall since 2006 despite the drop in 2009 due to a large amount of new completions. Overall occupancy of private factory space in 2011 stood at 92.4%, a marginal increase of 0.2 percentage points from the 91.7% in 2010. Specically, occupancy levels of private single-user factory space have consistently surpassed that of both private multiple-user factories and business parks, owing to most single-user factories being built-to-suit premises usually for owner-occupation. Occupancy for private single-user factories, multiple-user factories and business parks was 94.5%, 89.4% and 80.0% respectively in 2011 (Figure 1.6). All three types of factories posted an increase in occupancy in 2011 especially that for business parks, as tenants started taking up the large supply of business park space which came on stream in 2010.
URA Median Rent of Private Multiple-User Factory Space (LHS) % y-o-y change (RHS)
3.6 Multiple-user Median Prices Median prices of private multiple-user factories posted larger YOY increases compared to median rents. Median prices have increased by 27.1% from $373 per sq ft in 2010, to $474 per sq ft 2011 (Figure 1.8), compared to median rents which increased by 16.2%.
40
Figure 1.8 Median Prices for Private Multiple-user Factory Space

$ per sq ft 500 450 400 350 300 250 200 150 100 50 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 0 % 40 30 20 10 0 -10 -20 -30
Figure 1.9 Potential Supply of High-tech Industrial Space Expected Year of Completion
000 sq ft (GFA) 1,400 1,200 1,000 800 600 400 200 2012 2013 2014 2015
URA Median Price of Private Multiple-User Factory Space (LHS) % YOY change (RHS)
This could be due in part to the affordability of stratatitled industrial units compared to residential and ofce space in Singapore, leading to increased investor interest in industrial space as Singapores residential prices continue to rise despite the introduction of the cooling measures. 3.7 High-tech Industrial Space High-tech industrial spaces are similar to business parks in that they have a better corporate image and higher specifications compared to conventional industrial space. These improved specications are usually in, but not limited, to the following areas: Passenger lift capacity; Amenities and facilities; Air-conditioning system; Building automation system; Security service; and Building nishes. These specifications may also vary widely across different high-tech industrial buildings, depending on their usage and purpose. There is no standard classication for high-tech industrial space and the term high-tech industrial space is broadly understood in the market. High-tech spaces differ from business parks in terms of geographical setting and zoning. High-tech spaces are individual buildings, while business parks are areas zoned as such with stringent planning conditions. According to DTZs proprietary database, there is approximately 17-18 million sq ft (NLA) of high-tech industrial space in Singapore as at end-2011. About 2.9 million sq ft (GFA) of high-tech space is scheduled for completion over the next four years, with completions peaking in 2014 (1.28 million sq ft) (Figure 1.9).
ANNUAL REPORT 2011
Due to the quality of building specications and facilities of high-tech industrial space, they are often used as data centres, research & development, or back-end functions. As such, they generally command higher rent than traditional multiple-user factories. The 75th percentile median rent of multiple-user factories is therefore used as a rental proxy for private high-tech industrial space. Median rents for high-tech spaces have been on the increase since 2010, with rents in the East Region reecting the strongest performance, increasing 17% from $2.47 per sq ft per month in 2010, to $2.90 per sq ft per month in 2011. High-tech industrial space in the East Region has consistently commanded the highest rents in Singapore (Figure 1.10). Figure 1.10 Median Rent of Private High-tech Industrial Space
$ per sq ft per month 3.5 3 2.5 2 1.5 1 0.5 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Islandwide Central Region North East Region West Region

East Region North Region
41

3.8 Investment Sales Most of the large investment sales in 2011 came from the industrial GLS program. Table 1.7 lists some major industrial investment sales in 2011. Table1.7 Major Industrial Investment Sales (2011)
Property/Location Purchaser Vendor Tenure GFA (sq ft) Price ($ million) Price (per sq ft GFA) Type of Area
Q1 2011 Mandai Estate Ang Mo Kio Street 62 Q2 2011 8/8A Biomedical Grove Ascendas REIT Ascendas (Tuas) P/L 30+30 years (from Feb 2005) 60 years 397,522 125.6 $315.96 Land Lian Beng-Centurion (Mandai) Pte. Ltd. Sim Lian Group Unknown URA Freehold 60 years 503,606 752,200 67 128.1 $133.04 $170.34 Land GLS
Woodlands Avenue 12 (Parcel 2) Q3 2011
OKH Development Pte. Ltd.
URA
554,231
84.24
$152.00
GLS
Kallang Basin 7, Kolam Soilbuild Group Ayer 3, Kolam Ayer 4, Tai Seng Kallang Basin 1, Kallang Basin 2, Kallang Basin 3, Bedok, Kampong Ubi Woodlands Avenue 12 (Parcel 3) Q4 2011 Kaki Bukit Road 4/ Bartley Road East Gambas Avenue/ Gambas Crescent Lavender Street/ Kallang Ave Corporation Place NSS Properties Pte. Ltd. Hock Lian Seng Holdings Ltd PLC 8 Development Pte. Ltd. Ascendas REIT Mapletree Industrial Trust
JTC
46 years
1,925,167 288.33
$149.77
JTC divestment exercise JTC divestment exercise GLS
JTC
46 years
2,758,260 400.3
$145.13
OKH Development Pte. Ltd.
URA
99 years
505,903
71.84
$142.00
URA URA JTC Corporation Place Limited Unknown
30 years 60 years 60 years 60 years (from 1 Oct 1990) 32 years (from 30 Jan 1995)
558,875 576,590 915,405 820,048
66 78.17 218.3 99
$118.09 $135.57 $238.47 $120.72
GLS GLS GLS Land
7000 Ang Mo Kio Avenue 5
Unknown
628,956
91.5
$145.48
Land
Source: JTC, URA, SGX, DTZ Consulting, February 2012
42
4.0
Private Warehouse Space
4.1 Existing Supply Total private warehouse stock increased by 2.3% (1.7 million sq ft) from 74.4 million sq ft in 2010 to 76.1 million sq ft in 2011. Though higher than the increase of 0.9 million sq ft in 2010, this was still lower than the increases in 2008 (3.9 million sq ft) and 2009 (2.9 million sq ft). Major new warehouse developments completed in 2011 include (Table 1.8): Table 1.8 Major Private Warehouse Developments Completed (2011)
Developer Location Planning Region NLA (sq ft)
Table 1.9 highlights major private warehouse developments which are scheduled to complete in 2012. Table 1.9 Major Private Warehouse Developments Completing (2012) Developer/ Development Yang Kee Holdings Pte. Ltd. BP-SDV Pte. Ltd. Location Jurong Pier Road Pioneer Turn/ Pioneer View Sunview Way Planning Region West GFA (sq ft) 614,726
West
453,268
Changi Pan Asia North Way Logistics Singapore Pte. Ltd. SM Intergrated Tanjong Transware Pte. Penjuru Ltd. Yang Kee Holdings Pte. Ltd. Pandan Logistics Hub Jurong Pier Road Pandan Road
East
186,200 Second Development Pte. Ltd.
West
399,341
West
806,200
West
387,500
West
304,600
4.2 Potential Supply According to the URA, there is about 11.2 million sq ft(14) of private warehouse space in the pipeline as at Q4 2011. Of this, 58% (6.5 million sq ft) is under construction while the remaining 42% (4.7 million sq ft) is still being planned. A large amount of warehouse potential supply (45%, 5.1 million sq ft) is expected to complete in 2013 (Figure 1.11). Figure 1.11 Potential Supply of Private Warehouse Space by Development Status(15) and Expected Year of Completion
000 sq ft (GFA) 6,000 5,000 4,000 3,000 2,000 1,000 0 2012 2013 2014 2015 2016 >2016
4.3 Demand and Occupancy Average annual demand for private warehouse space from 2002 2011 was 2.2 million sq ft, exceeding average annual supply of 1.9 million sq ft for the same period. Annual demand for private warehouse space has been greater than the annual supply since 2004 except during the economic crisis in 2009 which saw annual demand for private warehouse space shrinking from 4.5 million sq ft in 2008 to 0.6 million sq ft in 2009. The development of Singapore into a global integrated logistics hub has been instrumental in contributing to the healthy demand for private warehouse space. Annual demand for private warehouse space in 2011 was 3.7 million sq ft, double that of the annual supply of 1.7 million sq ft. The annual demand in 2011 was also almost double that of the annual demand in 2010 (1.9 million sq ft), a further attestation to the thriving logistics industry in Singapore.
Under Construction
Planned
(14) Includes all private warehouse space in the pipeline, regardless of size or planning status. (15) Includes the supply from new development and redevelopment projects with provisional and written permission as well from other categories of supply e.g. (i) projects with outline provisional permission, (ii) developments submitted for planning approval and which are under consideration, (iii) projects on awarded GLS sites for which plans have not been submitted for approval, (iv) planned projects in the GLS programme (sites on the conrmed list and triggered sites on the reserve list, (v) planned public developments for which plans have not been submitted to URA for planning approval.
43

Since the 2009 economic crisis which saw a drop in occupancy of private warehouse space to 89.9%, occupancy levels have since rebounded to 94.3% in 2011, surpassing the previous peak of 92.7% in 2008 (Figure 1.12). Figure 1.12 Annual Supply, Demand and Occupancy of Islandwide Private Warehouse Space
000 sq ft (NLA) 6,000 5,000 4,000 3,000 2,000 1,000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 % 96 94 92 90 88 86 84 82 80
4.5 Median Prices Median prices for private warehouse space continued to increase at an increasing rate, rising 28.0% in 2011 to $636 per sq ft, compared to 2010s increase of 23.7% to $497 per sq ft per month (Figure 1.14). This is in line with the strong demand and occupancy levels seen in Figure 1.11, and is contributed in part from Singapores role as a regional logistics hub. Figure 1.14 Median Prices of Private Warehouse Space
$ per sq ft 700 600 500 400 300 200 100 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 % 30 20 10 0 -10 -20 -30
Annual Supply (LHS) Annual Demand (LHS) Occupancy (RHS) Average Annual Demand between 2002 and 2011: 2.2 million sq ft Average Annual Supply between 2002 and 2011: 1.9 million sq ft
URA Median Price of Private Warehouse Space (LHS) % y-o-y change (RHS)
5.0
Outlook
4.4 Median Rents Median rents of private warehouse space continued their rise from 2010, albeit at a slower pace. Private warehouse median rents increased 13.4% from $1.63 per sq ft in 2010, to $1.85 per sq ft in 2011 (Figure 1.13). This is a slightly smaller increase as compared with that of private multiple-user factory median rentals, which increased 16.2% in 2011. Figure 1.13 Median Rents of Private Warehouse Space
$ per sq ft per month 2.00 1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 % 30 25 20 15 10 5 0 -5 -10 -15 -20
The outcome of the global economy for 2012 is uncertain with the Eurozone debt crisis still unresolved. As the global economy loses momentum, Asian economies, including Singapore, will be affected. With Singapores economy heavily dependent on trade, a Eurozone recession will reduce Singapores exports to Europe and consequently industrial production, and this will impact GDP. In addition, with the introduction of new conditions to some sites in the industrial GLS program which took effect on 1 January 2012, it signals that the government is concerned about increasing occupancy costs for industrialists. This will ensure that future industrial space will be used according to their intended purposes, resulting in sustainable growth in rents and prices. With a survey from the Economic Development Board indicating that manufacturers are becoming more cautious, coupled with a weaker GDP growth in 2012, it is likely that rents and prices of the private multiple-user factory segment will be affected.
URA Median Rent of Private Warehouse Space (LHS) % y-o-y change (RHS)
44
The high-tech industrial sector is also correlated to the ofce market as a result of its high specications and substitutability for some ofce functions. As such, rents and prices of high-tech spaces are more volatile than that of multiple-user factory spaces, reecting its correlation with the ofce market. As the ofce market is expected to soften in 2012, high-tech rents and prices will be affected as well. In terms of the private warehouse sector, demand for storage is expected to remain strong due to the establishment of Singapore as a regional logistics hub. However, the threat of a global recession and a lower GDP growth forecast for 2012 is likely to impact rent and price increases. As such, warehouse rents and prices are likely to see slower declines compared to that of private multiple-user factories. Our outlook on the rents and prices of private multipleuser factories, high-tech industrial space, and private warehouse spaces for end-2012 are as follows (Table 1.10):
Table 1.10 Outlook on Rents and Prices

Type of Property % change end-2012
Private Multiple-user Factory Median Rents Private Multiple-user Factory Prices High-tech Industrial Median Rents High-tech Industrial Prices Private Warehouse Median Rents Private Warehouse Prices
Source: DTZ Consulting, February 2012
-8% -8% -10% -10% -3% -3%
Appendix 1 - Planning Regions in Singapore
Source: URA, February 2012
ANNUAL REPORT 2011
45
BEY ND CONVENTIONS
9.91%
0.5% above forecast FY2011 Annualised Distribution Yield
Shariah Compliance
SHARIAH COMPLIANCE OF SABANA SHARIAH COMPLIANT REIT
Sabana Shariah Compliant REIT is managed in accordance with Shariah investment principles and procedures, which are consistent with principles of Islamic law and general considerations of ethical investments in terms of social responsibility in asset selection and structuring. Sabana Shariah Compliant REIT is required to ensure that the total rental income from lessees, tenants and/ or sub-tenants engaging in activities which are nonpermissible under the Shariah investment principles, which include activities relating to conventional nancial and insurance services, gaming, non-halal production, tobacco-related products, non-permitted entertainment activities and stock-broking in non-compliant securities does not exceed 5.0% per annum of the gross revenue of Sabana Shariah Compliant REITs portfolio of properties. Sabana Shariah Compliant REIT donates non-Shariah rental income to charitable causes on a quarterly basis. Thus far, the non-Shariah income represents less than 0.3% of the gross revenue. Islamic nance and investment is growing in importance globally and across Asia. Recent data by Deutsche Bank predicted that global Islamic banking assets could reach US$1.8 trillion by the end of 2016 approximately 90% higher than the US$939 billion recorded in 2010(1). Being Shariah compliant, Sabana Shariah Compliant REIT is therefore able to tap into relatively more diverse sources of equity funding and a larger investor base.
The Shariah Adviser

Sabana Shariah Compliant REIT has engaged Five Pillars Pte. Ltd. (Five Pillars), a Singapore-based Islamic nance advisory rm that specialises in Shariah advisory, training and structuring products that are Shariah compliant, to act as the Shariah Adviser. Five Pillars has been providing Islamic nance consultancy services since its incorporation in 2008. The Shariah Adviser serves as a conduit between the independent Shariah Committee and the compliance ofcer, and will provide advice on, amongst others, the implementation of the Shariah guidelines. The Shariah Adviser will, on behalf of the Independent Shariah Committee, collect, collate and relay all necessary and relevant data from the Manager to the Independent Shariah Committee. Representatives from the Shariah Adviser may also inspect and verify the properties and activities of Sabana Shariah Compliant REIT on behalf of the Independent Shariah Committee.
The Independent Shariah Committee

The Independent Shariah Committee is an external committee comprising independent Shariah scholars selected by the Manager based on the advice of the Shariah Adviser. Sabana Shariah Compliant REIT is pleased to have the services of some of the best Shariah and conventional nance experts and scholars that it draws its Shariah endorsement from. They are: Dr. Mohamed Ali Elgari; Professor Dr. Obiyathulla Ismath Bacha; and Dr. Ashraf bin Mohammed Hashim.
Source: (1) Deutsche Bank Global Markets Research, Global Research, November 2011, Global Islamic Banking No longer unconventional
ANNUAL REPORT 2011
47
Corporate Social Responsibility
With the aim of fostering positive relationships within the community in which it operates, the Manager actively seeks out needy causes within Singapore and its neighbouring countries where it can make a difference. Since its listing, Sabana Shariah Compliant REIT has made donations(1) to the following causes:
July 2011
S$13,859 was donated to the Singapore Kadayanallur Muslim League to provide social and nancial assistance to the local Indian Muslim community.
February 2012
S$26,358(2) was donated to the Philippines Typhoon Washi Appeal through the Singapore Red Cross Society(3).
June 2011 November 2011

S$40,195 was donated to the Singapore Red Cross Societys South East Asia Flood Appeal to support the ood relief operations by the Red Cross Societies in Thailand, Cambodia, Laos, Philippines and Vietnam. S$23,553 was donated to the Straits Times School Pocket Money Fund to provide needy children with pocket money for school. S$23,553 was donated to the Embassy of Japan in Singapore for the relief and reconstruction efforts in Japan.
September 2011
S$27,718 was donated to Majlis Ugama Islam Singapore, also known as Islamic Religious Council of Singapore, to support the aLIVE programme at Al Ansar Mosque for needy children who need nancial and supportive assistance.
High res. images needed
(1) 100% derived from non-Shariah income of Sabana Shariah Compliant REIT for FY2011, equating to approximately 0.21% of Sabana Shariah Compliant REITs NPI for the same period. There is no impact on the DPU. (2) Non-Shariah income generated for the period from 1 October 2011 to 31 December 2011. (3) All donations to the Singapore Red Cross Society are non-tax deductible since the donations were made to causes outside Singapore.
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Investor Relations
Sabana Shariah Compliant REIT Offers Opportunities to All Investors

Although Sabana Shariah Compliant REIT adheres to the principles of Islamic law, it welcomes all investors to participate in its growth, regardless of nationality or religion. Shariah compliance means that the Trust adheres to the high ethical standards set by Islamic laws, making it an attractive investment product for everyone. Sabana Shariah Compliant REIT believes in transparency and remaining accessible to existing and potential Unitholders, investors and stakeholders. Since its IPO, the Trust has made numerous presentations and seminars, and has published all relevant information in a timely manner. In 2011, Sabana Shariah Compliant REIT not only delivered returns to Unitholders, but also achieved a high level of industry recognition, internationally. Since its listing, Sabana Shariah Compliant REIT has been awarded eight international awards for its achievements in various areas. In addition, it has been listed in an increasing number of conventional and Shariah indices, raising its prole further. As the Trust progresses into its second year, we are building on the past years success, seeking new and more efcient methods of engaging stakeholders and potential investors. Meanwhile, if you have enquires or feedback, please let us hear from you.
Investor & Media Relations Activities FY2011

1st Quarter Taking the World Public Asian IPO Series, Singapore Panel Discussion Singapore Management University Islamic Finance News Seminar Islamic Investor Summit (Dubai) Euromoney 10 th Islamic Finance Summit (London) Islamic Finance News Awards 2010 2nd Quarter Analysts Results Brieng for 1Q2011 Financial Results Inaugural HSBC ASEAN Conference 10th Annual Real Estate Investment World Asia 2011 Daiwa Property Seminar 2011 2nd Annual World Islamic Banking Conference 2011 Phillip Capital Investor Conference Islamic Banking & Finance Seminar 2011 Bloombergs Islamic Finance Seminar 3rd Quarter Analysts Results Brieng for 2Q2011 Financial Results SGX-Nasdaq OMX IR Tools & Solutions Launch Panel Discussion Berita Harian Financial Planning Conference SIASs Asian Investment Conference Exhibition 2011 Phillip Capital Open House 2011 4th Quarter Analysts Results Brieng for 3Q2011 Financial Results Triple A Islamic Finance Awards 2011 8th Kuala Lumpur Islamic Finance Forum (Kuala Lumpur) S&P Capital IQ Investment Seminar Islamic Finance News Issuers & Investors Asia Forum (Kuala Lumpur) HSBC Champions 2011 18th World Islamic Banking Conference
Analyst Coverage
The Manager actively engages analysts via phone calls, emails or physical meetings to allow the investment community to have a greater understanding of Sabana Shariah Compliant REITs nancial and operational performances and strategies. The research houses which cover Sabana Shariah Compliant REIT are:
Research House Analyst(s)
UOB Kay Hian Research HSBC Global Research S&P Capital IQ Daiwa Capital Markets Singapore Phillip Securities Research
Terence Khi Pratik Burman Ray Sharon Wong Tam Ching Wah David Lum Travis Seah
Unitholders Enquiries To nd out more about Sabana Shariah Compliant REIT, please speak to your nancial adviser or contact us at: Sabana Real Estate Investment Management Pte. Ltd. 151 Lorong Chuan #02-03 New Tech Park Singapore 556741 Phone : Fax : Email : Website : (65) 6580 7750 (65) 6280 4700 enquiry@sabana.com.sg www.sabana-reit.com
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Corporate Governance
The Manager was appointed in accordance with the terms of the trust deed dated 29 October 2010 (as amended) (the Trust Deed). The Trust Deed outlines certain circumstances under which the Manager may be removed. The Manager and its ofcers are licensed under the Securities and Futures Act, Chapter 289 (SFA) to conduct real estate investment trust management with effect from 2 November 2010.
Ensuring compliance with the applicable provisions of the SFA and all other relevant legislation, the Listing Manual of SGX-ST, the CIS Code issued by the MAS (including the Property Funds Appendix), the Managers obligations under the Trust Deed, Singapore Financial Reporting Standards, the tax ruling issued by Inland Revenue Authority of Singapore and all relevant contracts. Attending to all regular communications with Unitholders. Supervising the property manager, which performs the dayto-day property management functions (including leasing, accounting, marketing, promotion, co-ordination and operations management) for Sabana Shariah Compliant REITs assets pursuant to the respective property management agreements.
The Manager is committed to good corporate governance as it believes that such self-regulation is essential to protect the interests of the Unitholders, as well as critical to the performance of the Manager. The Manager uses the Code of Corporate Governance 2005 (the Code) as its benchmark for its corporate governance policies and practices. The following segments describe the Managers main corporate governance policies and practices.
The Manager of Sabana Shariah Compliant REIT

The Manager has general power of management over the assets of Sabana Shariah Compliant REIT. The Managers main responsibility is to manage the assets and liabilities of Sabana Shariah Compliant REIT for the benet of its Unitholders. The Managers key nancial objectives are to provide Unitholders with a competitive rate of return on their investment by ensuring regular and stable distributions to Unitholders and to achieve long-term growth in the net asset value of the Trust. The Manager sets the strategic direction of Sabana Shariah Compliant REIT and gives recommendations to HSBC Institutional Trust Services (Singapore) Limited, as trustee of Sabana Shariah Compliant REIT (the Trustee), on the acquisition, divestment and enhancement of assets of Sabana Shariah Compliant REIT in accordance with its stated investment strategy. The Manager is also responsible for the risk management of the Trust. Other functions and responsibilities of the Manager include: Using its best endeavours to carry on and conduct its business in a proper and efcient manner and to conduct all transactions with, or on behalf of, Sabana Shariah Compliant REIT at arms length and on normal commercial terms. Preparing property plans on a regular basis, which may contain proposals and forecasts on net income, capital expenditure, sales and valuations, explanations of major variances from previous forecasts, written commentary on key issues and underlying assumptions on ination, annual turnover and any other relevant assumptions. The purpose of these plans is to explain the performance of Sabana Shariah Compliant REITs assets.
Sabana Shariah Compliant REIT, constituted as a trust, is externally managed by the Manager and accordingly, it has no personnel of its own. The Manager appoints experienced and well-qualied management to handle its day-to-day operations. The Manager has put in place procedures to comply with existing rules and regulations affecting listed real estate investment trusts. A compliance ofcer was appointed in compliance with MAS requirements. The Manager is pleased to report on its application of the principles and guidelines of the Code. For ease of reference, sections of the Code under discussion are specically identied. The Manager conrms that it has adhered to the principles and guidelines as set out in the Code where applicable. Any deviations from the Code are explained.
Board Matters
The Boards Conduct of Affairs Principle 1: Every company should be headed by an effective Board to lead and control the company. The Board of Directors of the Manager (the Board) is entrusted with the responsibility for the overall corporate governance of the Manager including establishing goals for management and monitoring the achievement of these goals. The Board is also responsible for the strategic business direction and risk management of Sabana Shariah Compliant REIT, and reviewing and assessing managements performance. All Board members participate in matters relating to corporate governance, business operations and risk assessments, nancial performance, and the nomination and review of Directors. The Board has established a framework for the management of the Manager and Sabana Shariah Compliant REIT, including a system of internal controls and risk management processes.
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The Board meets to review the Managers key activities. Board meetings are held once every quarter (or more often if necessary) to discuss and review the strategies and policies of Sabana Shariah Compliant REIT, including any signicant acquisitions and disposals, the annual budget, the nancial performance of the Trust against previously approved budget, and to approve the release of the quarterly, half year and full year results. The Board also reviews the risks to the assets of Sabana Shariah Compliant REIT, and acts judiciously upon the comments from the auditors of the Trust. Where necessary, additional Board meetings will be held to address signicant transactions or issues. The Articles of Association of the Manager provide for Board meetings to be held by way of telephone or video conferencing or other methods of simultaneous communication by electronic or telegraphic means. In the discharge of its functions, the Board is supported by Board committees that provide independent supervision of management, and which also serve to ensure that there are appropriate checks and balances. These Board committees are the Audit Committee and Nominating and Remuneration Committee. Each of these Board committees operates under delegated authority from the Board. The Board has adopted a set of internal controls, which sets out approval limits for, amongst others, capital expenditure, new investments and divestments, operating of bank accounts, bank borrowings as well as arrangement in relation to cheque signatories at Board level. Apart from matters that specically require approval from the Board, the Board approves transactions exceeding certain threshold limits, while delegating authority for transactions below those limits to the Board commitees. Changes to regulations, policies and accounting standards are monitored closely. Where the changes have an important impact on Sabana Shariah Compliant REIT or have an important bearing on the Managers or Directors disclosure obligations, the Directors will be briefed either during Board meetings or at specially convened sessions conducted by relevant professionals. Management also provides the Board with complete and adequate information on a timely manner through regular updates on nancial results, market trends and business developments. The number of Board meetings and Board committees meetings from 29 October 2010 (date of constitution of Sabana Shariah Compliant REIT) to 31 December 2011, as well as the attendance of their membership, are set out on page 55 of this Annual Report.
Board Composition and Guidance

Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgement on corporate affairs. The composition of the Board is determined using the following principles: the Chairman of the Board should be a Non-executive Director; at least one-third of the Board should comprise of Independent Directors; and the Board should be of appropriate size and mix of expertise and experience in business, nance, law and management skills critical to Sabana Shariah Compliant REITs businesses and that each Director brings to the Board an independent and objective perspective to enable balanced and well considered decisions to be made.
The Board presently consists of six Directors, of whom, only the Chief Executive Ofcer is an Executive Director, three are Independent Directors and two are Non-executive Directors. A Director is considered independent if he has no relationship with the Manager or its ofcers that could interfere, or be reasonably perceived to interfere, with the exercise of the Directors independent judgement. The independence of each Director is reviewed annually by the Nominating and Remuneration Committee. The following sets out information regarding the Directors: Independent Directors Mr Steven Lim Kok Hoong (Chairman) Mr Yong Kok Hoon Associate Professor Muhammad Faishal Bin Ibrahim Khan Surattee Non-executive Directors Mr Henry Chua Tiong Hock Ms Ng Shin Ein Executive Director Kevin Xayaraj, Chief Executive Ofcer The proles of the Directors are set out on page 16 of this Annual Report. The Board comprises business leaders and professionals with legal, accounting, fund management, property and business development backgrounds. The Board, through the Nominating and Remuneration Committee, is of the view that its current composition provides the necessary core competencies and that the current Board size is appropriate and effective, taking into
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consideration the nature and scope of Sabana Shariah Compliant REITs operations. Upon appointment, each Director is issued a formal letter of appointment setting out the relevant Directors duties and obligations, so as to acquaint them with their responsibilities as Directors of the Manager. In addition to talks conducted by relevant professionals, members of the Board are encouraged to attend training courses organised by the Singapore Institute of Directors, and also to participate in industry conferences, seminars or any training programme, so as to stay abreast of changes to the nancial and legal requirements, and the business environment and outlook. During the nancial period, a brieng was conducted for the Board on the proposed changes to the Code. The Directors also attended various conferences and programmes to enhance their knowledge and expertise. The majority of the Directors are non-executive and independent of management. This enables management to benet from their external, diverse and objective perspective on issues that are brought before the Board. It also enables the Board to work with management through robust exchange of ideas and views to help shape the strategic process. This, together with a clear separation of the roles between the Chairman and Chief Executive Ofcer, provides a healthy professional relationship between the Board and management, with clarity of roles and robust oversight as they deliberate on business activities of the Manager.
Board Membership
Principle 4: There should be a formal and transparent process for the appointment of new directors to the Board. The Board has on 27 July 2011 established a Nominating and Remuneration Committee to, among other things, make recommendations to the Board on all Board appointments. The Nominating and Remuneration Committee comprises three members, the majority of whom, including the Chairman of the Nominating and Remuneration Committee, are Independent Directors. The Nominating and Remuneration Committee consists of the following members: Associate Professor Muhammad Faishal (lndependent Director) Bin Ibrahim Khan Surattee (Chairman) Mr Yong Kok Hoon (lndependent Director) Mr Henry Chua Tiong Hock (Non-executive Director) The Nominating and Remuneration Committee has adopted specic terms of reference dening its scope and authority. Its duties with regard to nomination functions are: reviewing and assessing nominations for appointment or reappointment of members of the Board of Directors, the key executives of the Manager, and members of the various Board committees, for the purpose of proposing such nominations to the Board for approval; performing annual evaluation of the Boards performance with reference to objective performance criteria; reviewing Board structure, size and composition annually having regard to the scope and nature of the operations and the core competencies of the Directors; determining on an annual basis, the independence of Independent Directors; deciding whether a Director is able to and has been adequately carrying out his or her duties as a Director of the Manager particularly when the Director has multiple Board representations; and assessing the effectiveness of the Board as a whole, and the contribution by each individual Director to the effectiveness of the Board.
Chairman and Chief Executive Ofcer

Principle 3: There should be a clear division of responsibilities at the top of the company the working of the Board and the executive responsibility of the companys business which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power. The positions of Chairman and Chief Executive Ofcer are separate and the positions are held by two persons. The Chairman, Mr Steven Lim Kok Hoong, is an Independent Director while the Chief Executive Ofcer, Mr Kevin Xayaraj, is an Executive Director. The clear division of responsibilities between the Chairman and the Chief Executive Ofcer facilitates effective oversight and clear segregation of responsibilities. The Chairman and Chief Executive Ofcer are not related to each other. The Chairman is responsible for the overall management of the Board as well as ensuring that members of the Board work together with management in a constructive manner to address strategies, business operations and enterprise issues. The Chief Executive Officer has full executive responsibilities over the business direction and operational decisions concerning the management of Sabana Shariah Compliant REIT. He works closely with the Board to implement the policies set by the Board to realise the Managers vision.
52
The principal remuneration functions of the Nominating and Remuneration Committee are: reviewing and recommending to the Board the remuneration framework, including specic remuneration packages for each Director and the key management; and reviewing and recommending long-term incentive schemes.
may also be in the form of briengs to the Directors or formal presentations by senior management staff in attendance at Board meetings or by external professionals. The Chief Executive Ofcer keeps Board members abreast of key developments affecting Sabana Shariah Compliant REIT as well as material transactions so that the Board is kept fully aware of the affairs of the Trust. The Board has separate and independent access to senior management and the Company Secretary at all times. The Company Secretary or its representative attends all Board meetings and ensures that all Board procedures are complied with. The Company Secretary also ensures that the Manager complies with the requirements of the Companies Act and the Listing Manual of the SGX-ST. The appointment and removal of the Company Secretary is a matter for the Board as a whole. If any of the Directors require independent professional advice in the furtherance of their duties, the cost of such professional advice will be borne by the Manager.
There are currently no option schemes or other long-term incentive scheme for employees or Directors.
Board Performance
Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board. The nancial indicators set out in the Code as guides for the evaluation of the Board and its Directors are in the Managers opinion more of a measurement of the Managers performance and therefore less applicable to the Directors. The Manager believes that performance of the Board and individual Board members would be better directed in providing proper guidance, diligent oversight and able leadership and support to the Manager in the management of the Trusts assets under challenging market conditions. This will in turn maximise Unitholders value. The Nominating and Remuneration Committee has adopted a set of performance criteria which includes the evaluation of the size and composition of the Board, the Boards access to information, Board processes and accountability. The Nominating and Remuneration Committee has conducted an annual review of Directors independence based on the Codes criteria for independence and is of the view that Mr Steven Lim Kok Hoong, Mr Yong Kok Hoon and Associate Professor Muhammad Faishal Bin Ibrahim Khan Surattee are considered Independent.
Remuneration Matters
Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration and for xing the remuneration packages of individual directors. Principle 8: The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the company successfully but companies must avoid paying more than is necessary for this purpose. Principle 9: Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the procedure for setting remuneration in the companys annual report. The Manager is committed to the principle that remuneration matters are structured and benchmarked to good market practices, to enable the Manager to attract and retain suitably qualied talents to manage and grow Sabana Shariah Compliant REITs business. The Nominating and Remuneration Committee serves the crucial role of ensuring that a formal and transparent process is established for xing the remuneration packages of individual Directors and key management. It serves to assist the Board in developing executive remuneration policies and practices which are appropriate in attracting, retaining and motivating Directors and key management of the Manager to successfully run Sabana Shariah Compliant REIT which the Manager manages and yet at the same time ensuring that overpayment is avoided.
Access To Information
Principle 6: In order to fulll their responsibilities, Board members should be provided with complete, adequate and timely information prior to Board meetings and on an on-going basis. To assist the Board in fullling its responsibilities, management provides adequate and timely information to the Board on Board affairs and issues prior to each Board meeting. Board meetings for each year are scheduled in advance to facilitate Directors individual arrangements in respect of ongoing commitments. Board papers are circulated in advance of each meeting and include background explanatory information to enable the Directors to make informed decisions. Explanatory information
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In carrying out its remuneration functions, the Nominating and Remuneration Committee may obtain independent external professional advice as it deems necessary. The expenses of such advice shall be borne by the Manager. All Directors and employees of the Manager are remunerated by the Manager and not Sabana Shariah Compliant REIT. As Sabana Shariah Compliant REIT does not bear the remuneration of the Managers Directors and employees, no report is provided by the Manager on the remuneration of its Directors and key management.
The Audit Committee is governed by written terms of reference. The role of the Audit Committee is to monitor and evaluate the effectiveness of the Managers internal controls. The Audit Committee also reviews the quality and reliability of information prepared for inclusion in nancial reports, and is responsible for the nomination of external auditors and reviewing the adequacy of external audits in respect of cost, scope and performance. The Audit Committee has recommended the outsourcing of the Managers internal audit function and this has been accepted by the Board. The Audit Committees responsibilities also include: Monitoring the procedures established to regulate Related Party Transactions, including ensuring compliance with the provisions of the Listing Manual of the SGX-ST relating to interested person transactions and the provisions of the Property Funds Appendix relating to interested party transactions (both such types of transactions constituting Related Party Transactions); Reviewing transactions constituting Related Party Transactions; Deliberating on conicts of interest situations involving Sabana Shariah Compliant REIT; Reviewing any donations of income which is derived from nonShariah compliant sources or non-core activities made by the Manager to charities that are not categorised as Institutions of Public Character, or to individuals or families; Reviewing external audit reports to ensure that where deciencies in internal controls have been identied, appropriate and prompt remedial action is taken by management; Reviewing arrangements by which staff and external parties may, in condence, raise probable improprieties in matters of nancial reporting or other matters, with the objective that arrangements are in place for the independent investigation of such matters and for appropriate follow up action; Reviewing internal audit reports at least twice a year to ascertain that the guidelines and procedures established to monitor Related Party Transactions have been complied with;
Accountability
Principle 10: The Board should present a balanced and understandable assessment of the companys performance, position and prospects. It is the aim of the Board to provide Unitholders with a detailed analysis, explanation and assessment of the nancial performance, position and prospects of Sabana Shariah Compliant REIT through the quarterly and annual nancial statements, announcements, and where applicable, press releases. Quarterly results are released to Unitholders within 45 days of the reporting period while full year results are released to Unitholders within 60 days of the nancial year end. In presenting the nancial statements, prepared in accordance with the Singapore Financial Reporting Standards prescribed by the Accounting Standards Council, the Board aims to provide a balanced and understandable presentation of Sabana Shariah Compliant REITs nancial performance, position and prospects.
Audit Committee
Principle 11: The Board should establish an Audit Committee with written terms of reference which clearly set out its authority and duties. The Audit Committee is appointed by the Board from among the Directors and is composed of four members, three of whom (including the Chairman of the Audit Committee) are Independent Directors. Presently, the Audit Committee consists of the following members: Mr Yong Kok Hoon (Chairman) Mr Steven Lim Kok Hoong Associate Professor Muhammad Faishal Bin Ibrahim Khan Surattee Ms Ng Shin Ein (Independent Director) (lndependent Director) (lndependent Director)
(Non-executive Director)
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Reviewing and approving the procedures for the entry into any financial instruments or foreign exchange hedging transactions and monitoring the implementation of such policy, including reviewing the instruments, processes and practices in accordance with the policy for entering into financial instruments or foreign exchange hedging transactions; Investigating any matters within the Audit Committees terms of reference, whenever it deems necessary; and Reporting to the Board on material matters, ndings and recommendations.
Ensuring that the internal audit function and accounting function is adequately resourced and has appropriate standing with Sabana Shariah Compliant REIT; Reviewing the appointment, re-appointment or removal of internal auditors (including reviewing their fees and scope of work); Monitoring the procedures in place to ensure compliance with applicable legislation, the Listing Manual of the SGX-ST and the Property Funds Appendix; Reviewing the appointment, re-appointment or removal of external auditors; Reviewing the nature and extent of non-audit services performed by the external auditors; Reviewing, on an annual basis, the independence and objectivity of the external auditors; Meeting with external and internal auditors without presence of the executive ofcers, at least on an annual basis; Reviewing the system of internal controls including nancial, operational, compliance controls and risks management process; Commissioning an annual internal controls audit, to be discontinued only after the Audit Committee is satisfied that Sabana Shariah Compliant REITs internal controls are robust and effective enough to mitigate any internal control weaknesses, and thereafter to carry out such internal controls audit as and when the Audit Committee deems t in order to satisfy itself that Sabana Shariah Compliant REITs internal controls remain robust and effective; Reviewing the nancial statements and the internal audit report;
The Audit Committee has full access to and co-operation from management and enjoys full discretion to invite any Director and executive ofcer of the Manager to attend its meetings. The Audit Committee also has full access to reasonable resources to enable it to discharge its functions properly. The Audit Committee had conducted a review of all non-audit services provided by the external auditors to Sabana Shariah Compliant REIT and is satised that the extent of such services will not prejudice the independence and objectivity of the external auditors. The amount paid and payable to external auditors for audit and non-audit services fees were S$122,300 and S$118,500, respectively, for the nancial period under review. The re-appointment of the external auditors will be subject to approval by way of an ordinary resolution of Unitholders at Sabana Shariah Compliant REITs rst Annual General Meeting, to be held on 12 April 2012. In appointing the audit rms for Sabana Shariah Compliant REIT, the Audit Committee is satised that Sabana Shariah Compliant REIT has complied with the requirements of Rules 712 and 715 of the Listing Manual of the SGX-ST. The number of Board meetings and Board committees meetings held during the period from 29 October 2010 (date of constitution) to 31 December 2011 and the attendance of Directors at these meetings are as follows:
Board Meetings No. of meetings
Audit Committee Meetings No. of meetings
Name of Directors
Attendance
Attendance
Nominating and Remuneration Meetings No. of meetings Attendance
Mr Steven Lim Kok Hoong Mr Yong Kok Hoon Mr Kevin Xayaraj Mr Henry Chua Tiong Hock Ms Ng Shin Ein(1) Associate Professor Muhammad Faishal Bin Ibrahim Khan Surattee
5 5 5 5 5 5
5 5 5 5 3 3
3 3 N.A. N.A. 2 3
3 3 N.A. N.A. 1 1
N.A. 2 N.A. 2 N.A. 2
N.A. 2 N.A. 2 N.A. 2
Note: (1) Ms Ng Shin Ein was appointed as a member of the Audit Committee on 27 April 2011.
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Internal Controls and Internal Audit

Principle 12: The Board should ensure that the Management maintains a sound system of internal controls to safeguard the shareholders investments and the companys assets. Principle 13: The Company should establish an internal audit function that is independent of the activities it audits. The Manager has put in place a system of internal controls of procedures and processes, including nancial, operational and compliance controls, and risk management systems to safeguard Sabana Shariah Compliant REITs assets, Unitholders interest as well as to manage risk. The internal audit function of the Manager is out-sourced to PricewaterhouseCoopers LLP. The internal auditors report directly to the Audit Committee on audit matters. The Audit Committee also reviews and approves the annual internal audit plan and reviews the internal audit reports and activities on an on-going basis. The Audit Committee is of the view that the internal auditor has adequate resources to perform its functions and has to the best of its ability, maintained its independence from the activities that it audits. The Audit Committee has reviewed the effectiveness, adequacy and robustness of the Managers risk management policies, procedures and internal controls, including nancial, operational and compliance controls. Material non-compliance and internal control weakness noted during the audit, and the auditors recommendations to address such non-compliance and weakness will be reported to the Audit Committee. Management follows up and implements the internal and external auditors recommendations. Based on the reviews conducted, discussions with auditors, and the Managements responses to the auditors recommendations for improvements to the system of internal controls put in place by the Manager, the Board and the Audit Committee are of the opinion that, in the absence of any evidence to the contrary, the internal controls including nancial, operational, compliance controls and risk management processes are adequate to meet the needs of Sabana Shariah Compliant REIT in its current business environment.
The Listing Manual of the SGX-ST requires that a listed entity discloses to the market matters that would likely have a material effect on the price of the entitys securities. The Manager strives to uphold a strong culture of timely disclosure and transparent communication with Unitholders and the investing community. The Managers disclosure policy requires timely and full disclosure of all material information relating to Sabana Shariah Compliant REIT by way of public releases or announcements through the SGX-ST via SGXNET at rst instance and subsequently, by way of the release on Sabana Shariah Compliant REITs website at http://www.sabana-reit.com. The Manager also uses other channels of communication with Unitholders such as: Media and analysts briengs. One-on-one/group meetings or conference calls, investor luncheons, local/overseas roadshows and conferences. Press releases on major developments of Sabana Shariah Compliant REIT. The Manager regularly communicates with Unitholders and receives and attends to their queries and concerns. More details on the Managers investor relations activities and efforts are found on page 49 of the Annual Report. Sabana Shariah Compliant REIT will hold its Annual General Meeting on 12 April 2012. The Annual General Meeting will provide Unitholders a formal communication channel with the Manager. Board members, senior management of the Manager and the external auditors of Sabana Shariah Compliant REIT will be in attendance at the upcoming Annual General Meeting to address questions and concerns of the Unitholders. Any Unitholder who is unable to attend the Annual General Meeting may appoint up to two proxies to attend and vote in his/her stead. Unitholders are encouraged to attend the Annual General Meeting to raise relevant questions and communicate their views.
Additional Information
Dealings in Units The Board has adopted an internal compliance code of conduct to provide guidance to its Directors, key management and employees dealing in Sabana Shariah Compliant REITs units (Units). Directors are required to give notice to the Manager of his acquisition of Units or changes in the number of Units he holds or in which he has an interest, within two business days after such acquisition or occurrence.
Communication with Unitholders

Principle 14: Companies should engage in regular, effective and fair communication with shareholders. Principle 15: Companies should encourage greater shareholder participation at annual general meetings, and allow shareholders the opportunity to communicate their views on various matters affecting the company.
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In general, the Managers policy encourages Directors and employees of the Manager to hold Units but prohibits them from dealing in such Units during the period commencing one month before the public announcement of Sabana Shariah Compliant REITs annual results, and quarterly results and (where applicable) property valuations, and ending on the date of announcement of the relevant results or, as the case may be, property valuations, and at any time whilst in possession of price sensitive information. The Directors and employees of the Manager are also prohibited from communicating price sensitive information to any person and dealing in Units on short-term considerations. In addition, the Manager has given an undertaking to the MAS that it will announce to the SGX-ST the particulars of its holdings in the Units and any changes thereto within two business days after the date on which it acquires or disposes of any Units, as the case may be. The Manager has also undertaken that it will not deal in the Units during the period commencing one month before the public announcement of Sabana Shariah Compliant REITs annual results, and quarterly results and (where applicable) property valuations, and ending on the date of announcement of the relevant results or, as the case may be, property valuations. Dealing with Conict of Interest The Manager has instituted the following procedures to deal with potential conicts of interest issues, which the Manager may encounter, in managing Sabana Shariah Compliant REIT: The Manager will not manage any other real estate investment trust which invests in the same type of properties as Sabana Shariah Compliant REIT; All key executive ofcers will be working exclusively for the Manager and will not hold other executive positions in other rms; All resolutions in writing of the Directors in relation to matters concerning Sabana Shariah Compliant REIT must be approved by a majority of the Directors who are not involved in the conict, including at least two Independent Directors; At least one-third of the Board shall comprise Independent Directors; and In respect of matters in which the Sponsor and/or its subsidiaries have an interest, direct or indirect, any nominees appointed by the Sponsor and/or its subsidiaries to the Board to represent their interest will abstain from voting. In such matters, the quorum must comprise a majority of the Independent Directors and must exclude the nominee directors of the Sponsor and/or its subsidiaries.
It is also provided in the Trust Deed that if the Manager is required to decide whether or not to take any action against any person in relation to any breach of any agreement entered into by the Trustee for and on behalf of Sabana Shariah Compliant REIT with a related party of the Manager, the Manager shall be obliged to consult a reputable law rm (acceptable to the Trustee) which shall provide legal advice on the matter. If the said law rm is of the opinion that the Trustee has a prima facie case against the party allegedly in breach under such agreement, the Manager shall be obliged to take appropriate action in relation to such agreement. The Directors shall have a duty to ensure that the Manager so complies. Notwithstanding the foregoing, the Manager shall inform the Trustee as soon as it becomes aware of any breach of any agreement entered into by the Trustee for and on behalf of Sabana Shariah Compliant REIT with a related party of the Manager and the Trustee may take any action it deems necessary to protect the rights of Unitholders and/or which is in the interest of Unitholders. Any decision by the Manager not to take action against a related party of the Manager shall not constitute a waiver of the Trustees right to take such action as it deems t against such related party.
Related Party Transactions

In general, the Manager has established procedures to ensure that all Related Party Transactions will be undertaken on an arms length basis and on normal commercial terms, which are generally no more favourable than those extended to unrelated third parties and will thus not be prejudicial to the interests of Sabana Shariah Compliant REIT and the Unitholders. As a general rule, the Manager must demonstrate to its Audit Committee that such transactions satisfy the foregoing criteria, which may entail obtaining (where practicable) quotations from parties unrelated to the Manager; or obtaining two or more valuations from independent professional valuers (in accordance with the Property Funds Appendix). In addition, the following procedures will be undertaken: Transactions (either individually or as part of a series or if aggregated with other transactions involving the same interested person during the same nancial year) equal to or exceeding S$100,000 in value but below 3% of the value of Sabana Shariah Compliant REITs net tangible assets will be subject to review by the Audit Committee at regular intervals; Transactions (either individually or as part of a series or if aggregated with other transactions involving the same interested person during the same nancial year) equal to or exceeding 3% but below 5% of the value of Sabana Shariah Compliant REITs net tangible assets will be subject to review and prior approval of the Audit Committee and immediately announced on SGX-ST. Such approval shall only be given if the transactions are on normal commercial terms and are consistent with similar types of transactions made by the Trustee (as trustee of Sabana Shariah Compliant REIT) with third parties which are unrelated to the Manager;
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Transactions (either individually or as part of a series or if aggregated with other transactions involving the same interested person during the same nancial year) equal to or exceeding 5% of the value of Sabana Shariah Compliant REITs net tangible assets will be reviewed and approved prior to such transactions being entered into, on the basis described in the preceding paragraph, by the Audit Committee which may, as it deems t, request advice on the transactions from independent advisers, including the obtaining of valuations from independent professional valuers. Furthermore, under the Listing Manual of the SGX-ST and the Property Funds Appendix, such transactions would have to be approved by the Unitholders at a meeting of Unitholders duly convened and held in accordance with the provisions of the Trust Deed; and Aggregate value of Related Party Transactions entered into during the nancial year under review will be disclosed in the Annual Report.
Funds Appendix have been complied with. The Audit Committee will periodically review all Related Party Transactions to ensure compliance with the Managers internal control procedures and with the relevant provisions of the Property Funds Appendix and/ or the Listing Manual of the SGX-ST. The review will include the examination of the nature of the transactions and its supporting documents or such other data deemed necessary by the Audit Committee. If a member of the Audit Committee has an interest in a transaction, he is required to abstain from participating in the review and approval process in relation to that transaction.
Management of Business Risk

Effective risk management is a fundamental part of Sabana Shariah Compliant REITs business strategy. Recognising and managing risk is central to the business and to protecting Unitholders interests and value. Sabana Shariah Compliant REIT operates within overall guidelines and specic parameters set by the Board. Each transaction is comprehensively analysed to understand the risks involved. Responsibility for managing risk lies initially with the business unit concerned, working within the overall strategy outlined by the Board. The Board meets quarterly, or more often if necessary, and reviews the nancial performance of the Manager and Sabana Shariah Compliant REIT against a previously approved budget. The Board will also review the business risks of Sabana Shariah Compliant REIT, examine liability management and act upon any comments from the auditors of the Trust. In assessing business risk, the Board considers the economic environment and risks relevant to the property industry. The Board reviews management reports and feasibility studies on individual investment projects prior to approving major transactions. Management meets regularly to review the operations of the Manager and Sabana Shariah Compliant REIT and discuss any disclosure issues. For more information on risk management framework, please refer to Risk Management on page 61 of the Annual Report.
For Related Party Transactions entered into or to be entered into by the Trustee, the Trustee is required to consider the terms of such transactions to satisfy itself that such transactions are conducted on arms length basis and on normal commercial terms, are not prejudicial to the interests of Sabana Shariah Compliant REIT and the Unitholders, and are in accordance with all applicable requirements of the Property Funds Appendix and/ or the Listing Manual of the SGX-ST relating to the transaction in question. Further, the Trustee has the ultimate discretion under the Trust Deed to decide whether or not to enter into a Related Party Transaction. If the Trustee is to sign any Related Party Transaction contract, the Trustee will review the contract to ensure that it complies with the requirements relating to Related Party Transaction as well as such other guidelines as may from time to time be prescribed by the MAS and the SGX-ST to apply to real estate investment trusts. Role of the Audit Committee for Related Party Transactions All Related Party Transactions will be subjected to regular periodic reviews by the Audit Committee. The Managers internal control procedures are intended to ensure that Related Party Transactions are conducted on arms length basis and on normal commercial terms and are not prejudicial to the interest of Unitholders. The Manager will maintain a register to record all Related Party Transactions which are entered into by Sabana Shariah Compliant REIT. The Manager will incorporate into its internal audit plan a review of all Related Party Transactions entered into by Sabana Shariah Compliant REIT. The Audit Committee shall review the internal audit reports to ascertain that the guidelines and procedures established to monitor Related Party Transactions have been complied with. In addition, the Trustee will also have the right to review such audit reports to ascertain that the Property
Whistle-Blowing Policy
The Audit Committee has put in place procedures to provide employees of the Manager with well-defined and accessible channels to report on suspected fraud, corruption, dishonest practices or other similar matters relating to Sabana Shariah Compliant REIT or the Manager, and for the independent investigation of any reports by employees and appropriate followup action. The aim of the whistle-blowing policy is to encourage the reporting of such matters in good faith, with the condence that employees making such reports will be treated fairly, and to the extent possible, be protected from reprisal.
58
Shariah Compliance
Sabana Shariah Compliant REIT is being offered as a Shariah compliant REIT so as to offer conventional and Shariah investors the potential for regular and stable distributions and long-term growth in NAV and DPU, and hence the traditional characteristics of listed equity. In order to be a Shariah compliant REIT, Sabana Shariah Compliant REIT will be managed by the Manager in accordance with Shariah principles and shall adhere to such investment principles in addition to the laws, rules and regulations of any other relevant regulatory or supervisory body or agency applicable to Sabana Shariah Compliant REIT. To enable Sabana Shariah Compliant REIT to comply with Shariah investment principles and procedures, the Manager has, through the Shariah Adviser, appointed the Independent Shariah Committee to provide on-going advice on Shariah compliance by the Trust. For further details on the Shariah Adviser and Independent Shariah Committee, please refer to Shariah Compliance on page 47 of the Annual Report. Shariah Compliance Procedure The Shariah compliance procedure of Sabana Shariah Compliant REIT was considered and adopted by the Independent Shariah Committee. Although Sabana Shariah Compliant REIT is not required to be governed by the accounting, auditing, governance, ethics and Shariah standards of the Auditing and Accounting Organisation of the Islamic Financial Institutions (AAOIFI) and/or the Islamic Financial Services Board (IFSB), both of which are international bodies that issue standards to promote the soundness and stability of the Islamic nancial services industry, the Independent Shariah Committee will look to the recommendations of AAOIFI and IFSB and will apply them if deemed relevant, appropriate and possible. The Shariah Adviser has taken into account the Shariah standards promulgated by the AAOIFI and IFSB to draw up the Shariah compliance procedure of Sabana Shariah Compliant REIT. The procedure for assessing the on-going Shariah compliance of the Trust prior to the issuance of the annual Shariah Certication is as follows: The Independent Shariah Committee and the Shariah Adviser will conduct periodic and ad hoc reviews at least once a year to ensure that Sabana Shariah Compliant REIT remains Shariah compliant;
The Shariah Adviser will visit the properties in the property portfolio of Sabana Shariah Compliant REIT (including future acquisitions) on an ad hoc basis and as part of the annual audit for the Independent Shariah Committee to issue the Shariah Certication to ensure that the activities at these premises are Shariah compliant and match the respective tenancy and leasing agreements; and In the event that there is a change resulting in unavoidable non-Shariah compliant activities, the Independent Shariah Committee has to ensure that the due cleansing procedure is applied to the additional non-Shariah compliant activities before any distributions are made to Unitholders.
The Independent Shariah Committee and the Shariah Adviser, in undertaking the above procedures, will require the Manager to: Provide the Independent Shariah Committee and/or the Shariah Adviser with all relevant data reasonably required by them for inspection at any time; Appoint a single contact point who will act as a liaison ofcer between the Manager, the Independent Shariah Committee and Shariah Adviser; and Highlight, as soon as practicable, to the Independent Shariah Committee and the Shariah Adviser, any event of deviation or changes in the operations, nancing, deposit, investment, insurance or risk management activities that may affect the Shariah compliance of Sabana Shariah Compliant REIT.
On completion of the annual audit in connection with the issuance of the Shariah Certication, the Independent Shariah Committee will issue and sign-off on an annual audit report to be submitted to the Manager annually. The compliance ofcer of the Manager will act as the liaison ofcer between the Manager, the Independent Shariah Committee and the Shariah Adviser. Shariah Remedial Process The Independent Shariah Committee will convene periodically (at least once annually) to deliberate over the compliance of Sabana Shariah Compliant REIT and decide whether to issue the Shariah Certication conrming the Trusts Shariah compliant status. If any of the Shariah Guidelines are breached, the Manager must disclose such breach to the Independent Shariah Committee and the Shariah Adviser as soon as practicable. Such disclosure should include details of the nature of the breach and the circumstances leading to the breach. All relevant information and documents must also be provided alongside such disclosure.
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The Independent Shariah Committee, in discussion with the Manager, will explore all possible avenues to rectify the breach. In the event that no immediate rectication is possible, the Independent Shariah Committee will put on record an acknowledgment of the breach and the necessary rectication measures that the Manager will have to undertake. This record will indicate a mutually agreed time frame for the rectication and will be considered during the annual review of the Shariah compliance of Sabana Shariah Compliant REIT for the purpose of issuing the Shariah Certication. If Sabana Shariah Compliant REIT is unable to resolve any breach within the given time frame, the Manager would have to seek a further extension from the Independent Shariah Committee, citing reasons for the inability to rectify, or delay in rectifying, the breach. Where the Manager is in the process of rectifying a breach of the Shariah Guidelines which is required in order for Sabana Shariah Compliant REIT to be Shariah compliant, the Independent Shariah Committee may nonetheless issue the Shariah Certication. If the Independent Shariah Committee does not grant a further extension of time or the Manager is unable to resolve the breach within the extended time frame, the Independent Shariah Committee may not issue the Shariah Certication. In the event that Sabana Shariah Compliant REIT is unable to resolve any breach of the Shariah Guidelines within the given time frame and the Manager has sought a further extension of time from the Independent Shariah Committee, this will be announced to Unitholders through the SGX-ST via SGXNET. The Independent Shariah Committee may also refuse to issue the Shariah Certication, or revoke the existing Shariah Certication, in the following circumstances: Where the Manager deliberately deviates from the Shariah Guidelines and indulges in activities that contravene the Shariah Guidelines; Where the Manager continuously breaches the Shariah Guidelines and refuses to rectify the position to an acceptable level; and Where there is a material misrepresentation or wilful omission of any material information that is otherwise required by the Independent Shariah Committee for the purposes of issuing the Shariah Certication.
The total amount of fees, including reimbursables, paid to the Shariah Adviser and the Independent Shariah Committee (through the Shariah Adviser) for the nancial period ended 31 December 2011 is approximately S$74,000.
Utilisation of IPO Proceeds

The Manager has raised gross proceeds of S$664.4 million from the initial public offering of the Units on 26 November 2010. On the same day, the Manager has also drawn down the Commodity Murabaha Facility of S$220.6 million (the Facility). The total proceeds raised from the listing as well as the amount drawn down from the Facility were used substantially for the purchase of investment properties, payment of issue expenses, transaction and nancing related costs, in line with the intended applications as stated in the Prospectus. The following sets out the sources and applications of the total proceeds:
Sources S$000
Public Offering Sponsor Units(1) Cornerstone Units(2) Commodity Murabaha Facility Total
Applications
533,395 28,350 102,695 220,563 885,003

S$000
Acquisition of the IPO properties Issue expenses Transaction costs Financing related costs Total
851,150 28,222 5,287 344 885,003
Notes: (1) Comprises 27,000,000 Units issued to the Sponsor (through its wholly-owned subsidiary, Singapore Enterprises Private Limited). (2) Comprises 97,804,555 Units issued to Cornerstone Investors being Al-Salam Bank-Bahrain B.S.C., Capital Investment & Brokerage/Jordan Ltd. Co., FIL Investment Management (Hong Kong) Limited (on behalf of various accounts), and Meren Pte Ltd.
Any refusal by the Independent Shariah Committee to issue, or revocation by the Independent Shariah Committee of, the Shariah Certication will be announced to Unitholders via SGXNET. On 24 October 2011, Sabana Shariah Compliant REIT passed its rst Shariah audit since IPO. The Shariah Compliance Certicate, which is valid for one year from the date of issue, is displayed on page 5 of the Annual Report.
60
Risk Management
Risk management is integral to the whole business of Sabana Shariah Compliant REIT. The Manager has implemented a system of controls to create an acceptable balance between the benets derived from managing risks and the cost of managing those risks. The Manager also monitors its risk management processes closely to ensure an appropriate balance between controls and business objectives is achieved. Risk management policies and systems are reviewed regularly to reect changes in market conditions and the strategic direction of the Trust. The Audit Committee oversees how management monitors compliance with Sabana Shariah Compliant REITs risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the Trusts exposure to those risks. The Audit Committees oversight role is assisted by an internal audit function which is outsourced to an independent professional rm (Internal Audit). Internal Audit undertakes both regular and ad-hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee. For more information on Audit Committee, please refer to Corporate Governance on page 50 60 of the Annual Report. This following section presents information about the Trusts exposure to various types of risks, the Managers key objectives, policies and processes for measuring and managing risks, and its approach to capital management.
Upon receiving the Boards approval, the investment proposals are then submitted to the Trustee who is the nal approving authority for all investment decisions. The Trustee also monitors the compliance of the Managers executed investment transactions with the restrictions under the Property Funds Appendix and the provisions of the Trust Deed.
Operational Risk
The Manager has established comprehensive policies and standard operating procedures (SOPs), which are reviewed and updated regularly, to manage its day-to-day activities and to mitigate operational risks that may arise. Compliance to SOPs is ensured through training of employees, regular checking by the compliance ofcer and regular follow-up reviews by Internal Audit. The Manager also regularly reviews and evaluates its internal processes by conducting company-wide control selfassessments, to assess the key risks identied and evaluate the internal controls put in place.
Compliance Risk
The capital markets services (CMS) licence issued by the MAS to the Manager on 2 November 2010 for real estate investment trust management pursuant to the SFA will be valid until 30 September 2013, unless otherwise cancelled or renewed. Failure to comply with the CMS licensing conditions could result in the Managers licence being cancelled or not renewed by the MAS, adversely affecting the operations of the Trust. The Units of Sabana Shariah Compliant REIT were listed on the SGX-ST on 26 November 2010. Although it is intended that the Units will remain listed on the SGX-ST, there is no guarantee of the continued listing of the Units. Sabana Shariah Compliant REIT may not continue to satisfy the listing requirements as set out in the Listing Manual of the SGX-ST. Shariah non-compliance risk may also arise from Sabana Shariah Compliant REITs failure to comply with Shariah rules and principles as determined by the Shariah Adviser and Independent Shariah Committee, pertaining to asset selection, nancing, investment and deposit facilities, insurance and risk management solutions.
Market Risk
Sabana Shariah Compliant REITs portfolio is subject to real estate market risks such as occupancy and rental rate volatility, competition, supply and demand, as well as regulations affecting Singapores industrial sector. Such risks are monitored and reported to the management on an on-going basis, for actions to be taken as and when required.
Investment Risk
The risks arising from investment activities are managed through a prudent and disciplined investment approach, particularly in the area of asset selection and pricing. All acquisitions have to be yield-accretive. All investment proposals are subject to vigorous scrutiny by the Board based on specic investment criteria including but not limited to yield accretion, location, building specication, quality of tenant and lease structure. The Board is made aware of all key risks considered and that they have been addressed or mitigated appropriately.
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Risk Management
To mitigate these risks, the compliance ofcer consults the regulatory bodies and works closely with the management and the Shariah Adviser on an on-going basis, to ensure Sabana Shariah Compliant REIT complies with the conditions of the CMS licence and the requirements under MAS Notices and Guidelines, the Listing Manual of the SGX-ST and Shariah guidelines, respectively.
within acceptable parameters, while optimising the return. Sabana Shariah Compliant REIT does not have any exposure to foreign exchange rates and equity price risks. Prot rate risk The Trusts exposure to uctuations in prot rates relates primarily to borrowings. Prot rate risk is managed on an ongoing basis with the primary objective of limiting the extent to which net prot expense could be affected by adverse movements in prot rates. Sabana Shariah Compliant REIT hedges its portfolio exposure to prot rate volatility on its oating rate borrowings by way of prot rate swaps. As at 31 December 2011, the Trust had entered into prot rates swaps that effectively xed 96.7% of its borrowings.
Financial Risk
Credit risk Credit risk is the potential nancial loss to Sabana Shariah Compliant REIT resulting from the failure of a tenant or counterparty to settle its nancial and contractual obligations, as and when they fall due. The Manager has an established process to evaluate the creditworthiness of its tenants and prospective tenants to minimise potential credit risk. Credit evaluations are performed by the investment, asset and property management teams before lease agreements are entered into with prospective tenants. Security in the form of bankers guarantees, insurance bonds or cash security deposits are obtained prior to the commencement of the lease. On an on-going basis, tenant credit is closely monitored by the asset management team and arrears managed by the Property Manager. Cash and xed deposits are placed with regulated and reputable nancial institutions. Liquidity risk Liquidity risk is the risk that Sabana Shariah Compliant REIT will encounter difculty in meeting the obligations associated with its nancial liabilities that are settled by delivering cash or another nancial asset. The Managers approach to managing liquidity is to ensure, as far as possible, that it will always have sufcient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Trusts reputation. The Manager monitors and maintains a level of cash and cash equivalents deemed adequate to nance Sabana Shariah Compliant REITs operations and to mitigate the effects of fluctuations in cash flows. In addition, the Manager also monitors and observes the CIS Code issued by the MAS concerning limits on total borrowings. Market risk Market risk is the risk that changes in market prices, such as prot rates, foreign exchange rates and equity prices will affect Sabana Shariah Compliant REITs total return or the value of its holdings of nancial instruments. The objective of market risk management is to manage and control market risk exposures
Capital Management
The Manager reviews the capital management policy of Sabana Shariah Compliant REIT regularly so as to safeguard its ability to continue as a going concern, maintain an optimal capital structure, and maximise Unitholders value. The Manager monitors its exposures to various risk elements and externally imposed requirements by closely adhering to clearly established management policies and procedures. The Manager endeavours to employ an appropriate mix of debt and equity in nancing acquisitions and assets enhancements, and utilise prot rate and currency hedging strategies where appropriate. The Manager reviews this policy on a continuous basis. Sabana Shariah Compliant REIT is subject to the aggregate leverage limit as dened in the Property Funds Appendix. The Property Funds Appendix stipulates that the total borrowings and deferred payments (together, the Aggregate Leverage) of a property fund should not exceed 35.0% of its deposited property except that the Aggregate Leverage of a property fund may exceed 35.0% of its deposited property (up to a maximum of 60.0%) if a credit rating of the property fund from Fitch Inc., Moodys or Standard and Poors is obtained and disclosed to the public. The property fund should continue to maintain and disclose a credit rating so long as its Aggregate Leverage exceeds 35.0% of its deposited property. For this nancial period, Standard and Poors has assigned a long-term corporate credit rating of BBB- and axA- ASEAN scale rating with a stable outlook for Sabana Shariah Compliant REIT. Sabana Shariah Compliant REIT has complied with the Aggregate Leverage limit throughout the nancial period.
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Corporate Directory
Sabana Shariah Compliant REIT

REGISTERED ADDRESS HSBC Institutional Trust Services (Singapore) Limited 21 Collyer Quay #14-01 HSBC Building Singapore 049320 Phone: (65) 6534 1900 Fax: (65) 6533 1700 TRUSTEE HSBC Institutional Trust Services (Singapore) Limited 21 Collyer Quay #03-01 HSBC Building Singapore 049320 Phone: (65) 6658 0458 Fax: (65) 6534 5526 AUDITOR OF THE TRUST KPMG LLP Public Accountants and Certied Public Accountants 16 Rafes Quay #22-00 Hong Leong Building Singapore 048581 Phone: (65) 6213 3388 Fax: (65) 6225 4142 Partner-in-charge: Jek Lim Appointed since nancial period ended 31 December 2011 LEGAL ADVISER Allen & Gledhill LLP One Marina Boulevard #28-00 Singapore 018989 Phone: (65) 6890 7188 Fax: (65) 6327 3800 UNIT REGISTRAR Boardroom Corporate & Advisory Services Pte. Ltd. 50 Rafes Place #32-01 Singapore Land Tower Singapore 048623 Phone: (65) 6536 5355 Fax: (65) 6536 1360
BANKERS The Hongkong and Shanghai Banking Corporation Limited (Singapore Branch) Malayan Banking Berhad (Singapore Branch) United Overseas Bank Limited CIMB Bank Berhad (Singapore Branch) STOCK QUOTES STI M1GU Bloomberg SSREIT SP Reuters SABA.SI POEMS SBNR.SG WEBSITE www.sabana-reit.com
BOARD OF DIRECTORS Steven Lim Kok Hoong Chairman and Independent Director Yong Kok Hoon Independent Director Associate Professor Muhammad Faishal Bin Ibrahim Khan Surattee Independent Director Ng Shin Ein Non-executive Director Henry Chua Tiong Hock Non-executive Director Kevin Xayaraj Chief Executive Ofcer and Executive Director AUDIT COMMITTEE Yong Kok Hoon (Chairman) Steven Lim Kok Hoong Associate Professor Muhammad Faishal Bin Ibrahim Khan Surattee Ng Shin Ein NOMINATING AND REMUNERATION COMMITTEE Associate Professor Muhammad Faishal Bin Ibrahim Khan Surattee (Chairman) Yong Kok Hoon Henry Chua Tiong Hock COMPANY SECRETARY OF THE MANAGER Chang Ai Ling
The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch (HSBC), was the sole financial adviser for the initial public offering (the Offering) of units in Sabana Shariah Compliant REIT. HSBC, United Overseas Bank Limited and Daiwa Capital Markets Singapore Limited (the Joint Bookrunners) were the joint global coordinators, issue managers, bookrunners and underwriters for the Offering. HSBC, United Overseas Bank Limited and Daiwa Capital Markets Singapore Limited assume no responsibility for the contents of this Annual Report.
The Manager
REGISTERED ADDRESS Sabana Real Estate Investment Management Pte. Ltd. 151 Lorong Chuan #02-03 New Tech Park Singapore 556741 Phone: (65) 6580 7750 Fax: (65) 6280 4700 INTERNAL AUDITOR PricewaterhouseCoopers LLP 8 Cross Street #17-00 PWC Building Singapore 048424 Phone: (65) 6236 3388 Fax: (65) 6236 3300
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Financials
65 66 67 68 69 70 71 72 75 76 Report of the Trustee Statement by the Manager Independent Auditors Report Statements of Financial Position Statements of Total Return Distribution Statements Statements of Movements in Unitholders Funds Portfolio Statement Consolidated Statement of Cash Flows Notes to Financial Statements
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Report of the Trustee
HSBC Institutional Trust Services (Singapore) Limited (the Trustee) is under a duty to take into custody and hold the assets of Sabana Shariah Compliant Industrial Real Estate Investment Trust (the Trust) and its subsidiary (the Group) in trust for the holders (Unitholders) of units in the Group (the Units). In accordance with the Securities and Futures Act, Chapter 289, of Singapore, its subsidiary legislation and the Code on Collective Investment Schemes, the Trustee shall monitor the activities of Sabana Real Estate Investment Management Pte. Ltd. (the Manager) for compliance with the limitations imposed on the investment and borrowing powers as set out in the trust deed dated 29 October 2010 (as amended) (the Trust Deed) between the Manager and the Trustee in each annual accounting period and report thereon to Unitholders in an annual report. To the best knowledge of the Trustee, the Manager has, in all material respects, managed the Trust during the period covered by these financial statements, set out on pages 68 to 102 in accordance with the limitations imposed on the investment and borrowing powers set out in the Trust Deed.
For and on behalf of the Trustee, HSBC Institutional Trust Services (Singapore) Limited
Antony Wade Lewis Director
Singapore 24 February 2012
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Statement by the Manager
In the opinion of the directors of Sabana Real Estate Investment Management Pte. Ltd. (the Manager), the accompanying financial statements set out on pages 68 to 102 comprising the statements of financial position, statements of total return, distribution statements and statements of movements in Unitholders funds of the Group and the Trust, portfolio statement and statement of cash flows of the Group and notes to the financial statements are drawn up so as to present fairly, in all material respects, the financial position of the Group and the Trust as at 31 December 2011, the total return, distributable income and movements in Unitholders funds of the Group and the Trust and cash flows of the Group for the period then ended in accordance with the recommendations of Statement of Recommended Accounting Practice 7 Reporting Framework for Unit Trusts issued by the Institute of Certified Public Accountants of Singapore and the provisions of the Trust Deed. At the date of this statement, there are reasonable grounds to believe that the Group and the Trust will be able to meet its financial obligations as and when they materialise.
For and on behalf of the Manager, Sabana Real Estate Investment Management Pte. Ltd.
Kevin Xayaraj Director and Chief Executive Officer
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Independent Auditors Report

Unitholders of Sabana Shariah Compliant Industrial Real Estate Investment Trust (Constituted in the Republic of Singapore pursuant to a trust deed dated 29 October 2010 (as amended))
REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of Sabana Shariah Compliant Industrial Real Estate Investment Trust (the Trust) and its subsidiary (the Group), which comprise the statements of financial position of the Group and the Trust and portfolio statement of the Group as at 31 December 2011, the statements of total return, distribution statements and statements of movements in Unitholders funds of the Group and the Trust and statement of cash flows of the Group for the period then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 68 to 102.
MANAGERS RESPONSIBILITY FOR THE FINANCIAL STATEMENTS The Manager of the Trust is responsible for the preparation and fair presentation of these financial statements in accordance with the recommendations of Statement of Recommended Accounting Practice 7 Reporting Framework for Unit Trusts issued by the Institute of Certified Public Accountants of Singapore, and for such internal control as the Manager of the Trust determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
AUDITORS RESPONSIBILITY Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Trusts preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Groups internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Manager of the Trust, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OPINION In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Trust present fairly, in all material respects, the financial position of the Group and the Trust as at 31 December 2011 and the total return, distributable income and movements in Unitholders funds of the Group and the Trust and cash flows of the Group for the period then ended in accordance with the recommendations of Statement of Recommended Accounting Practice 7 Reporting Framework for Unit Trusts issued by the Institute of Certified Public Accountants of Singapore.
KPMG LLP Public Accountants and Certified Public Accountants
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Statements of Financial Position

Note
Group 31 December 2011 $000
Trust 31 December 2011 $000
Non-current assets Investment properties Intangible assets Subsidiary Total non-current assets Current assets Trade and other receivables Cash and cash equivalents Total current assets Total assets Current liabilities Trade and other payables Borrowings Total current liabilities Non-current liabilities Trade and other payables Borrowings Derivative liabilities Total non-current liabilities Total liabilities Net assets Represented by: Unitholders funds Units issued and to be issued (000) Net asset value per Unit (S$)
* Less than $1,000
4 5 6
1,043,887 4,588 1,048,475
1,043,887 4,588 * 1,048,475
7 8
2,019 31,822 33,841 1,082,316
2,019 31,822 33,841 1,082,316
9 10
15,562 11,918 27,480
15,562 11,918 27,480
9 10 11
20,514 347,947 4,593 373,054 400,534 681,782
20,514 347,947 4,593 373,054 400,534 681,782
681,782 12 13 637,295 1.07
681,782 637,295 1.07
The accompanying notes form an integral part of these financial statements.
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Statements of Total Return

For the period from 29 October 2010 to 31 December 2011
Note
Group and Trust 29 October 2010 to 31 December 2011 $000
Gross revenue Property expenses Net property income Finance income Finance costs Net financing costs Amortisation of intangible assets Managers fees Trustees fees Donation of non-Shariah compliant income Other trust expenses Net income Net change in fair value of derivatives Net change in fair value of investment properties Total return for the period before taxation and distribution Income tax expense Total return for the period after taxation and before distribution Earnings per Unit (cents) Basic and diluted
14 15
76,945 (3,871) 73,074 138 (12,027) (11,889) (1,469) (5,072) (407) (155) (623) 53,459 (4,593) 39,376 88,242 88,242
16 5 17 18 19
20
21
13.91
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69
Distribution Statements
Amount available for distribution to Unitholders at the beginning of the period Total return for the period after taxation before distribution Non-tax deductible/(chargeable) items: Managers fees payable in units Amortisation of intangible assets Amortisation of transaction costs Trustees fees Donation of non-Shariah compliant income Net change in fair value of financial derivatives Net change in fair value of investment properties Effects of recognising rental income on a straight line basis over the lease term Other items Net effect of non-tax deductible/(chargeable) items Income available for distribution to Unitholders for the period Distributions to Unitholders Distribution of 0.87 cents per unit for period from 26 November 2010 to 31 December 2010 Distribution of 2.17 cents per unit for period from 1 January 2011 to 31 March 2011 Distribution of 2.18 cents per unit for period from 1 April 2011 to 30 June 2011 Distribution of 2.14 cents per unit for period from 1 July 2011 to 30 September 2011 Income available for distribution to Unitholders at end of the period
88,242
4,058 1,469 1,935 407 155 4,593 (39,376) (1,088) 208 (27,639) 60,603
5,517 13,760 13,845 13,614 46,736 13,867
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Statements of Movements in Unitholders Funds

Balance as at 29 October 2010 Operations Total return after taxation and before distribution Net increase in net assets resulting from operations Unitholders transactions Issue of units: Initial public offering Managers fee paid in units Managers fee payable in units Issue expenses Distribution to Unitholders Net increase in net assets resulting from Unitholders transactions Unitholders funds as at 31 December 2011
88,242 88,242
664,440 3,059 999 (28,222) (46,736) 593,540 681,782
ANNUAL REPORT 2011
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Portfolio Statement
GROUP
Committed % of total occupancy Carrying net assets rate as at values as at as at 31 December 31 December 31 December 2011 2011 2011 % $000 %
Description of Property
Type
Leasehold term
Location
151 Lorong Chuan(10)
High-tech industrial
45 years wef Listing Date 30 years wef 1 February 2006(2) 30 years wef 1 June 1995(3) 99 years wef 27 January 1984 99 years wef 1 January 1962 30 years wef 16 February 1988(4) 13 years wef 1 November 2004(5) 30 years wef 1 January 1996(6) (8)
151 Lorong Chuan
100
331,900
48.7
8 Commonwealth Lane(10) 9 Tai Seng Drive(10)
8 Commonwealth Lane 9 Tai Seng Drive
100
73,500
10.8
98
42,629(1)
6.3
200 Pandan Loop(10)
200 Pandan Loop
100
46,500
6.8
15 Jalan Kilang Barat(10) High-tech industrial
15 Jalan Kilang Barat 33 & 35 Penjuru Lane 18 Gul Drive
100
36,000
5.3
33 & 35 Penjuru Lane(10) 18 Gul Drive(10)
Chemical warehouse & logistics Chemical warehouse & logistics Chemical warehouse & logistics
100
82,600
12.1
100
35,300
5.2
1 Tuas Avenue 4(10)
1 Tuas Avenue 4
28,600
4.2
34 Penjuru Lane(10)
Warehouse & logistics 30 years wef 16 August 2002 Warehouse & logistics 30 years wef 1 January 1995(3) Warehouse & logistics 30 years wef 1 January 2006 (7) Warehouse & logistics 30 years wef 1 May 1995(3)
34 Penjuru Lane
100
62,000
9.1
51 Penjuru Road(10)
51 Penjuru Road
100
45,200
6.6
26 Loyang Drive(10)
26 Loyang Drive
100
33,600
4.8
3 Kallang Way 2A(10)
3 Kallang Way 2A
100
15,500
2.3
218 Pandan Loop(10)
Warehouse & logistics 30 years wef 218 Pandan Loop 16 September 1989 (3) Warehouse & logistics 30 years wef 1 August 1987(3) 3A Joo Koon Circle
100
13,900
2.0
3A Joo Koon Circle
100
40,327
5.9
2 Toh Tuck Link
Warehouse & logistics 30 years wef 2 Toh Tuck Link 16 December 1996(3)
100
40,115
5.9
Balance carried forward

927,671
136.0
72
Portfolio Statement
GROUP
Committed occupancy rate as at 31 December 2011 % % of total net assets as at 31 December 2011 %
Description of Property
Type
Leasehold term
Location
Carrying values as at 31 December 2011 $000
Balance brought forward 123 Genting Lane(10) General Industrial 60 years wef 1 September 1981 123 Genting Lane 100
927,671 25,100
136.0 3.7
30 & 32 Tuas Avenue 8(10) 21 Joo Koon Crescent
General Industrial
30 years wef 1 30 & 32 Tuas September 1996(3) Avenue 8 30 years wef 16 February 1994(3) 30 years wef 1 January 1992(3) 21 Joo Koon Crescent 39 Ubi Road 1
100
25,000
3.7
General Industrial
100
20,274
3.0
39 Ubi Road 1
General Industrial
100
32,000
4.7
6 Woodlands Loop
General Industrial
30 years wef 16 6 Woodlands Loop September 1994(3)
100
13,842(9)
2.0
Investment properties, at valuation Other assets and liabilities (net) Net assets
1,043,887 (362,105) 681,782
153.1 (53.1) 100.0
(1) (2) (3) (4) (5) (6) (7) (8)
The valuation of 9 Tai Seng Drive excludes the present value of income support component of $3.6 million. The Trust has an option to renew the land lease term for a further term of 23 years upon expiry. The Trust has an option to renew the land lease term for a further term of 30 years upon expiry. The Trust has an option to renew the land lease term for a further term of 31 years upon expiry. The Trust has an option to renew the land lease term for a further term of 20 years upon expiry. The Trust has an option to renew the land lease term for a further term of 21 years and 4 months upon expiry. The Trust has an option to renew the land lease term for a further term of 18 years upon expiry. As at 29 March 2011, the master tenant of 1 Tuas Avenue 4, Premier G&U Districenters Pte Ltd, defaulted on its rental and filed for voluntary liquidation. The master lease was secured by a security deposit of 12 months rent, which has been used to offset rental arrears and shortfalls. (9) The valuation of 6 Woodlands Loop excludes the present value of income support component of $0.9 million. (10) Initial IPO properties acquired on 26 November 2010 (Listing Date) (Initial Properties).
ANNUAL REPORT 2011
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Portfolio Statement
The carrying amounts of the Initial Properties as at 31 December 2011 were based on independent valuations undertaken by DTZ Debenham Tie Leung (SEA) Pte. Ltd. as of 30 September 2011. Valuations are determined in accordance with the Trust Deed, which requires the investment properties to be valued by independent registered valuers at least once a year, in accordance with the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore (MAS). The carrying amounts of the newly acquired investment properties as at 31 December 2011 were based on independent valuations as follows:
Description of property Name of independent valuer Date of valuation
6 Woodlands Loop 21 Joo Koon Crescent 3A Joo Koon Circle 2 Toh Tuck Link 39 Ubi Road 1
CKS Property Consultants Pte Ltd CKS Property Consultants Pte Ltd CKS Property Consultants Pte Ltd CKS Property Consultants Pte Ltd Knight Frank Pte Ltd
21 September 2011 25 August 2011 15 August 2011 15 August 2011 5 August 2011
The Manager is of the view that the valuations of the investment properties as at 31 December 2011 remain unchanged from those carried out at the respective dates as described above. Investment properties comprise properties used for the purpose of high-tech industrial, chemical warehouse and logistics, warehouse and logistics and general industrial use. Generally, the leases contain an initial non-cancellable period of three to five years. Subsequent renewals are negotiated with the lessee. With the exception of 9 Tai Seng Drive and 6 Woodlands Loop, which are leased on individual and single lease agreements respectively, all other investment properties are leased on master lease agreements.
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Consolidated Statement of Cash Flows

Note
Group 29 October 2010 to 31 December 2011 $000
Cash flows from operating activities Total return for the period after taxation and before distribution Adjustments for: Amortisation of intangible assets Managers fees payable in units Net change in fair value of financial derivatives Net change in fair value of investment properties Net financing costs Change in trade and other receivables Change in trade and other payables Cash generated from operating activities Tawidh (compensation on late payment of rent) received Net cash from operating activities Cash flows from investing activities Purchase of investment properties Intangible assets Finance income received from Commodity Murabaha deposits Net cash used in investing activities Cash flows from financing activities Proceeds from issue of new units Proceeds from borrowings Issue expenses paid Transaction costs paid Financing costs paid Distributions paid Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period
88,242 1,469 4,058 4,593 (39,376) 11,889 70,875 (2,019) 34,676 103,532 31 103,563
(1,004,511) (6,057) 107 (1,010,461)
B B
664,440 364,837 (28,222) (6,907) (8,692) (46,736) 938,720 31,822 31,822
(A)
Signicant Non-Cash Transactions 4,495,453 Units were issued or will be issued to the Manager by the Group, amounting to approximately $4,058,000 at various unit prices in partial satisfaction of Managers fee payable in respect of the period from 26 November 2010 to 31 December 2011.
(B)
Use of proceeds The proceeds from issue of new units and borrowings were used substantially for the purchase of investment properties, payment of issue expenses and financing costs.
ANNUAL REPORT 2011
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Notes to the Financial Statements
These notes form an integral part of the financial statements. The financial statements were authorised for issue by the Manager and the Trustee on 24 February 2012.
GENERAL Sabana Shariah Compliant Industrial Real Estate Investment Trust (the Trust) is a Singapore-domiciled unit trust constituted pursuant to the trust deed dated 29 October 2010 (as amended) (the Trust Deed) between Sabana Real Estate Investment Management Pte. Ltd. (the Manager) and HSBC Institutional Trust Services (Singapore) Limited (the Trustee). The Trust Deed is governed by the laws of the Republic of Singapore. The Trustee is under a duty to take into custody and hold the assets of the Trust, held by it or through its subsidiaries (collectively, the Group) in trust for the holders (Unitholders) of Units in the Trust (the Units). The Trust was a dormant private trust from the date of constitution until its acquisition of properties on 26 November 2010 (Initial Properties). It was formally admitted to the Official List of Singapore Exchange Securities Trading Limited (the SGXST) on 26 November 2010 and was included in the Central Provident Fund (CPF) Investment Scheme on 26 November 2010. The principal activity of the Trust is to invest in income producing real estate used for industrial purposes in Asia, as well as real estate-related assets, in line with Shariah investment principles. The Group has entered into several service agreements in relation to the management of the Trust and its property operations. The fees structures of these services are as follows: (a) Property managers fees The Property Manager is entitled under the Property Management Agreement to the following management fees on each property of the Trust located in Singapore under its management: a property management fee of 2.0% per annum of gross revenue of each property; and a lease management fee of 1.0% per annum of gross revenue of each property.
No lease management fee is payable in relation to the Initial Properties for the first three years of the initial contracted lease. The property management fee and the lease management fee are payable to the Property Manager in the form of cash. (b) Managers fees Pursuant to the Trust Deed, the Manager is entitled to the following managers fees: a base fee not exceeding the rate of 0.5% per annum of the value of the deposited property; and a performance fee equal to 0.5% per annum (or such lower percentage as maybe determined by the Manager in its absolute discretion) of the Net Property Income of the Trust or the relevant special purpose vehicles (SPV) in each financial year, payable on a yearly basis, provided the Trust achieves at least 10.0% in annual growth in distribution per Unit over the previous financial year (calculated after accounting for the performance fee (if any) for that financial year and after adjusting, at the discretion of the Manager, for any new Units arising from the conversion or exercise of any instruments convertible into Units which are outstanding at the time of calculation, and any rights or bonus issue, consolidation, subdivision or buy-back of Units).
The Manager may elect to receive the base fee and performance fee in cash or Units or a combination of cash and Units (as it may in its sole discretion determine).
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GENERAL (continued) (c) Trustees fees Pursuant to the Trust Deed, the Trustees fee shall not exceed 0.25% per annum of the value of the deposited property (subject to a minimum sum of $25,000 per month), excluding out-of-pocket expenses and goods and services tax. The actual fee payable will be determined between the Manager and the Trustee from time to time. The Trustee was also paid a one-time inception fee of $40,000. (d) Acquisition fees Pursuant to the Trust Deed, the Manager is entitled to acquisition fees of 1.0% (or such lower percentage as may be determined by the Manager) of each of the following: the acquisition price of any real estate purchased, whether directly or indirectly through one or more SPV by the Trust; the underlying value of any real estate which is taken into account when computing the acquisition price payable for the equity interests of any holding directly or indirectly the real estate, purchased whether directly or indirectly through one or more SPVs, by the Trust; and the acquisition price of any investment purchased by the Trust, whether directly or indirectly through one or more SPVs, in any debt securities in any property corporation or other SPV owning or acquiring real estate or any debt securities which are secured directly or indirectly by the rental income from real estate.
The Manager may, at its sole discretion, elect to receive the acquisition fee in cash or Units or a combination of cash and Units. Under the Property Funds Appendix of the Collective Investment Scheme code issued by the Monetary Authority of Singapore (Property Funds Appendix), in respect of any acquisition of real estate assets from interested parties, such a fee should be in the form of Units issued by the Trust at prevailing market price(s). Such Units should not be sold within one year from the date of their issuance. (e) Divestment fees Pursuant to the Trust Deed, the Manager is entitled to divestment fees of 0.5% (or such lower percentage as may be determined by the Manager) of each of the following: the sale price of real estate sold or divested, whether directly or indirectly through one or more Special Purpose Vehicles (SPV) by the Trust; the underlying value of any real estate which is taken into account when computing the sale price for the equity interests of any holding directly or indirectly the real estate, divested whether directly or indirectly through one or more SPVs, by the Trust; and the sale price of any investment sold by the Trust, whether directly or indirectly through one or more SPVs, in any debt securities in any property corporation or other SPV owning or acquiring real estate or any debt securities which are secured directly or indirectly by the rental income from real estate.
The Manager may, at its sole discretion, elect to receive the divestment fee in cash or Units or a combination of cash and Units. Under the Property Funds Appendix, in respect of any divestment of real estate assets from interested parties, such a fee should be in the form of Units issued by the Trust at prevailing market price(s). Such Units should not be sold within one year from the date of their issuance.
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2.
BASIS OF PREPARATION (a) Statement of compliance The financial statements have been prepared in accordance with the Statement of Recommended Accounting Practice (RAP) 7 Reporting Framework for Unit Trusts issued by the Institute of Certified Public Accountants of Singapore, and the applicable requirements of the Code on Collective Investment Schemes (the CIS Code) issued by the Monetary Authority of Singapore (MAS) and the provisions of the Trust Deed. RAP 7 requires the accounting policies to generally comply with the recognition and measurement principles of Singapore Financial Reporting Standards (FRS). (b) Basis of measurement The financial statements have been prepared on a historical cost basis except for the investment properties and financial derivatives which are stated at fair value and otherwise as described below. (c) Functional and presentation currency These financial statements are presented in Singapore dollars which is the Trusts functional currency. All financial information presented in Singapore dollars have been rounded to the nearest thousand, unless otherwise stated. (d) Use of estimates and judgements The preparation of the financial statements in conformity with RAP 7 requires the Manager to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised, and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are described in the following notes: (e) Note 4 Valuation of investment properties Note 27 Valuation of financial instruments
Changes in accounting policies A number of new standards, amendments to standards and interpretations are effective for the annual periods beginning 1 January 2011. The Group has applied these standards and the adoption has no financial effect on the results and financial position of the Group for the current financial period.
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SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied consistently by Group entities. (a) Basis of consolidation (i) Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in the Statement of Total Return. Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. (ii) Subsidiaries Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance. (iii) Loss of control Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equityaccounted investee or as an available-for-sale financial asset depending on the level of influence retained. (iv) Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. (v) Accounting for subsidiaries Investments in subsidiaries are stated in the Trusts statement of financial position at cost less accumulated impairment losses.
ANNUAL REPORT 2011
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SIGNIFICANT ACCOUNTING POLICIES (continued) (b) Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of the Groups entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective profit expense and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on retranslation are recognised in the Statement of Total Return. (c) Investment properties Investment properties are properties held either to earn rental income or capital appreciation or both. Investment properties are accounted for as non-current assets and are stated at initial cost on acquisition which includes expenditure that is directly attributable to the acquisition of the investment properties, and at fair value thereafter. Fair value is determined in accordance with the Trust Deed, which requires the investment properties to be valued by independent registered valuers in such manner and frequency required under the Property Funds Appendix of the CIS Code issued by the MAS. Fair value changes are recognised in the Statement of Total Return. When an investment property is disposed of, the resulting gain or loss is recognised in the Statement of Total Return as the difference between net disposal proceeds and the carrying amount of the property. Subsequent expenditure relating to investment properties that have already been recognised is added to the carrying amount of the assets when it is probable that future economic benefits, in excess of originally assessed standard of performance of the existing asset, will flow to the Group. All other subsequent expenditure is recognised as an expense in the period in which it is incurred. Investment properties are not depreciated. The properties are subject to continuing maintenance and are regularly revalued on the basis described above. For taxation purpose, the Trust may claim capital allowances on assets that qualify as plant and machinery under the Income Tax Act. (d) Intangible assets Intangible assets represent the unamortised income support receivable by the Group in accordance with the purchase agreement entered into with the vendors of 9 Tai Seng Drive and 6 Woodlands Loop. These intangible assets have finite useful lives and are measured at cost less accumulated amortisation and accumulated impairment loss. These intangible assets are amortised in the Statement of Total Return on a systematic basis over their estimated useful lives of 3 years to 5 years. Intangible assets are tested for impairment as described in Note 3(f).
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SIGNIFICANT ACCOUNTING POLICIES (continued) (e) Financial instruments (i) Non-derivative nancial assets The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. The Group has the following non-derivative financial assets: loans and receivables. Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Loans and receivables comprise cash and cash equivalents and trade and other receivables. Cash and cash equivalents comprise cash at bank. (ii) Non-derivative nancial liabilities The Group initially recognises financial liabilities on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective profit rate method. Other financial liabilities comprise borrowings and trade and other payables.
ANNUAL REPORT 2011
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SIGNIFICANT ACCOUNTING POLICIES (continued) (e) Financial instruments (continued) (iii) Derivative nancial instruments The Group holds derivative financial instruments to economically hedge its profit rate risk exposure. Derivatives are recognised initially at fair value; attributable transaction costs are recognised in the Statement of Total Return as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below. Other non-trading derivatives Changes in the fair value of the derivative hedging instrument that do not qualify for hedge accounting are recognised immediately in the Statement of Total Return. (f) Impairment (i) Non-derivative nancial assets A financial asset not carried at fair value through profit or loss is assessed at the end of each reporting period to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event has a negative effect on the estimated future cash flows of that asset that can be estimated reliably. Objective evidence that financial assets are impaired can include default or delinquency by a tenant, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a tenant or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the Group, economic conditions that correlate with defaults or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment. Loans and receivables The Group considers evidence of impairment for loans and receivables at a specific asset and collective level. All individually significant loans and receivables are assessed for specific impairment. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows, discounted at the assets original effective profit rate. Losses are recognised in the Statement of Total Return and reflected in an allowance account against loans and receivables. Profit income on the impaired asset continues to be recognised. When a subsequent event (e.g. repayment by a tenant) causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through the Statement of Total Return. (ii) Non-nancial assets The carrying amounts of the Groups non-financial assets, other than investment properties, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assets recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit (CGU) exceeds its estimated recoverable amount.
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SIGNIFICANT ACCOUNTING POLICIES (continued) (f) Impairment (continued) (ii) Non-nancial assets (continued) The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU. Impairment losses are recognised in the Statement of Total Return. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis. Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. (g) Issue expenses Issue expenses relate to expenses incurred in connection with the issue of Units. Such expenses are deducted directly against Unitholders funds. (h) Revenue recognition Rental income from operating leases Rental income receivable under operating leases from investment properties is recognised in the Statement of Total Return on a straight-line basis over the term of the lease, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased assets. Lease incentives granted are recognised as an integral part of total rental to be received. Contingent rentals are recognised as income in the accounting period on a receipt basis. No contingent rentals are recognised if there are uncertainties due to the possible return of amounts received. (i) Expenses (i) Property expenses Property expenses consist of property management fee (using the applicable formula stipulated in Note 1(a)), lease management fee and reimbursable expenses payable to the Property Manager and other property expenses in relation to the investment properties. Property expenses are recognised on an accrual basis. (ii) Managers fees Managers fees are recognised on an accrual basis using the applicable formula stipulated in Note 1(b). (iii) Trustees fees Trustees fees are recognised on an accrual basis using the applicable formula stipulated in Note 1(c).
ANNUAL REPORT 2011
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SIGNIFICANT ACCOUNTING POLICIES (continued) (j) Finance income and finance costs Finance income comprises profit income. Profit income is recognised as it accrues in the Statement of Total Return using the effective profit rate method. Finance costs comprise profit expense on Commodity Murabaha Facilities and profit rate swaps, amortisation of transaction costs incurred on Commodity Murabaha Facilities and brokerage and agent fees. All borrowing costs are recognised in the Statement of Total Return using the effective profit rate method. (k) Tax Tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in the Statement of Total Return except to the extent that it relates to a business combination, or items directly related to Unitholders funds, in which case it is recognised in Unitholders funds. Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous periods. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for: temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; and temporary differences related to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. The Inland Revenue Authority of Singapore (IRAS) has issued a tax ruling on the taxation of the Trust for income earned and expenditure incurred after its listing on the SGX-ST. Subject to meeting the terms and conditions of the tax ruling issued by IRAS, the Trustee is not subject to tax on the taxable income of the Trust, which includes profit distributions from liquid Islamic debt securities such as sukuks that the Trust may invest in, provided that at least 90% of the taxable income of the Trust is distributed within the year in which the income is derived (the tax transparency treatment). Instead, the Trustee and the Manager will deduct income tax at the prevailing corporate tax rate (currently 17%) from the distributions made to Unitholders that are made out of the taxable income of the Trust, except:
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SIGNIFICANT ACCOUNTING POLICIES (continued) (k) Tax (continued) (i) where the beneficial owners are individuals or Qualifying Unitholders, the Trustee and the Manager will make the distributions to such Unitholders without deducting any income tax; or where the beneficial owners are Qualifying Foreign Non-Individual Unitholders, the Trustee and the Manager will deduct Singapore income tax at the reduced rate of 10% for distributions made up to 31 March 2015, unless concession is extended.
(ii)
A Qualifying Unitholder is a Unitholder who is: A Singapore-incorporated company which is a tax resident in Singapore; A body of persons, other than a company or a partnership, registered or constituted in Singapore (for example, a town council, a statutory board, a registered charity, a registered co-operative society, a registered trade union, a management corporation, a club and a trade and industry association); and A Singapore branch of a foreign company which has presented a letter of approval from the IRAS granting a waiver from tax deduction at source in respect of distributions from the Trust.
A Qualifying Foreign Non-Individual Unitholder is one who is not a resident of Singapore for income tax purposes and: who does not have a permanent establishment in Singapore; or who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used to acquire the units are not obtained from that operation in Singapore.
The above tax transparency ruling does not apply to gains or profits from sale of real estate properties, if considered to be trading gains derived from a trade or business carried on by the Trust. Tax on such gains or profits will be assessed, in accordance to section 10(1)(a) of the Income Tax Act, Chapter 134 and collected from the Trustee. Where the gains or profits are capital gains, they are not subject to tax and the Trustee and the Manager may distribute the capital gains without tax being deducted at source. (l) Distribution policy The Groups distribution policy is to distribute at least 90% of its distributable income. Distributions are usually made on a quarterly basis, no later than 90 days after the end of the distribution period. The Group will distribute 100% of its distributable income for the period ended 31 December 2011 and year ending 31 December 2012. (m) Earnings per Unit The Group presents basic and diluted earnings per Unit (EPU) data for its Units. Basic EPU is calculated by dividing the total return attributable to Unitholders of the Group by the weighted average number of ordinary Units outstanding during the period. Diluted EPU is determined by adjusting the total return attributable to Unitholders and the weighted average number of Units outstanding for the effects of all dilutive potential Units.
ANNUAL REPORT 2011
85
SIGNIFICANT ACCOUNTING POLICIES (continued) (n) Segment reporting An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Groups other components. All operating segments operating results are reviewed regularly by the Groups CEO to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available. Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. (o) New standards and interpretations not yet adopted A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2011, and have not been applied in preparing these financial statements. None of these are expected to have a significant effect on the financial statements of the Group and the Trust.
INVESTMENT PROPERTIES
Group and Trust 31 December 2011 $000
At date of constitution Acquisition of investment properties Changes in fair value of investment properties At 31 December 2011
1,004,511 39,376 1,043,887
Investment properties are stated at fair value based on valuations performed by independent professional valuers having appropriate recognised professional qualifications and recent experience in the location and category of property being valued. In determining the fair value, the valuers used valuation techniques which involve certain estimates. In relying on the valuation reports, the Manager has exercised its judgement and is satisfied that the valuation methods and estimates are reflective of current market conditions. The valuation reports are prepared in accordance with recognised appraisal and valuation standards. The estimates underlying the valuation techniques in the next financial year may differ from current estimates, which may result in valuations that may be materially different from the valuations as at reporting date. The valuers have considered the capitalisation approach and/or discounted cash flows in arriving at the open market value as at the reporting date. The capitalisation approach capitalises an income stream into a present value using single-year capitalisation rates, the income stream used is adjusted to market rentals currently being achieved within comparable investment properties and recent leasing transactions achieved within the investment property. The discounted cash flow method involves the estimation and projection of an income stream over a period and discounting the income stream with an internal rate of return to arrive at the market value. The discounted cash flow method requires the valuer to assume a rental growth rate indicative of market and the selection of a target internal rate of return consistent with current market requirements. Security As at 31 December 2011, investment properties with an aggregate carrying amount of $998,045,000 are pledged as security to secure borrowing (see Note 10).
86
INTANGIBLE ASSETS
Cost At date of constitution Addition during the period At 31 December 2011 Amortisation At date of constitution Amortisation for the period At 31 December 2011 Carrying amount At date of constitution At 31 December 2011
6,057 6,057
1,469 1,469
4,588
Intangible assets represent the unamortised income support receivable by the Group and the Trust in accordance with the purchase agreements entered into with the vendors of 9 Tai Seng Drive and 6 Woodlands Loop.
SUBSIDIARY
Trust 31 December 2011 $000
Equity investment at cost

* Less than $1,000
Details of the subsidiary are as follows:

Name of subsidiary Country of incorporation Ownership interest 31 December 2011 %
Sabana Treasury Pte. Ltd.(1)

(1) Audited by KPMG LLP Singapore
Singapore
100%
ANNUAL REPORT 2011
87
TRADE AND OTHER RECEIVABLES

Amounts due from related parties, trade Trade receivables Other receivables Deposits Loans and receivables Prepayments
8 484 1,094 65 1,651 368 2,019
Outstanding balances with related parties are unsecured. There is no allowance for doubtful debts arising from these outstanding balances. The exposure of the Group and the Trust to credit risks and impairment losses related to trade and other receivables are disclosed in Note 27.
CASH AND CASH EQUIVALENTS

Bank balances Fixed deposits
3,322 28,500 31,822
The weighted average effective profit rate relating to cash and cash equivalents at the balance sheet date is 0.63%.
TRADE AND OTHER PAYABLES

Amounts due to related parties, trade Trade payables Security deposits Rental received in advance Retention sums Finance costs payable Accrued operating expenses Others
512 5,684 10,308 10,835 3,751 1,244 1,024 2,718 36,076 15,562 20,514 36,076
Current Non-current
88
TRADE AND OTHER PAYABLES (continued) Outstanding balances with related parties are unsecured. The exposure of the Group and the Trust to liquidity risk related to trade and other payables are disclosed in Note 27.
10
BORROWINGS
Commodity Murabaha Facilities Term (Facilities A, B & C) Revolving (Facility D) Less: Unamortised capitalised transaction costs
352,837 12,000 (4,972) 359,865
Maturity of borrowings Current Non-current
11,918 347,947 359,865
Terms and debt repayment schedule Terms and conditions of outstanding borrowings are as follows:
Group and Trust 2011 Carrying Face value amount $000 $000
Currency
Nominal profit rate %
Year of maturity
Group and Trust Term Commodity Murabaha Facilities A and B Revolving Commodity Murabaha Facility D Term Commodity Murabaha Facility C
* Swap Offer Rate
SGD SGD SGD
* SOR + 2.5% * SOR + 2.5% * SOR + 2.5%
2013 2013 2014
252,563 12,000 100,274
248,943 11,918 99,004
The exposure of the Group and the Trust to liquidity and profit rate risks related to borrowings is disclosed in Note 27. Borrowings at the reporting date comprise $364.8 million secured Commodity Murabaha Facilities from various institutional banks. The Commodity Murabaha Facilities are secured by, inter alia: A first ranking legal mortgage over all the properties acquired as at date of Listing, 3A Joo Koon Circle, 2 Toh Tuck Link and 21 Joo Koon Crescent (collectively, the Securitised Properties) (or, where title to the Securitised Properties have not been issued, an assignment of building agreement coupled with a mortgage in escrow); Assignment of insurance, assignment of proceeds and assignment of Property Management Agreements relating to the Securitised Properties; and A fixed and floating charge over the other assets of the Trust relating to the Securitised Properties.
ANNUAL REPORT 2011
89
11
DERIVATIVE LIABILITIES
Profit rate swaps Derivative liabilities as a percentage of net assets
4,593 0.67%
The Group uses profit rate swaps to manage its exposure to profit rate movements on its floating rate profit-rate bearing Commodity Murabaha Facilities by swapping the profit-rate expense on term loans from floating rates to fixed rates. Profit rate swaps with a total notional amount of $352.8 million have been entered into at the reporting date to provide fixed rate funding for terms of 2 to 3 years at a weighted average profit rate of 3.74% per annum.
12
UNITS IN ISSUE
31 December 2011 000
Units in issue: At 26 November 2010 Managers fees paid in units as at 31 December 2011 Units to be issued: Managers fees payable in units Total Units issued and to be issued at 31 December 2011
632,800 3,345 636,145 1,150 637,295
Each Unit in the Trust represents an undivided interest in the Trust. The rights and interests of Unitholders are contained in the Trust Deed and include the right to: receive income and other distributions attributable to the Units held; participate in the termination of the Trust by receiving a share of all net cash proceeds derived from the realisation of the assets of the Trust and available for purposes of such distribution less any liabilities, in accordance with their proportionate interests in the Trust. However, a Unitholder has no equitable or proprietary interest in the underlying assets of the Trust and is not entitled to the transfer to it of any assets (or part thereof) or of any estate or interest in any asset (or part thereof) of the Trust; and attend all Unitholders meetings. The Trustee or the Manager may (and the Manager shall at the request in writing of not less than 50 Unitholders or one-tenth in number of the Unitholders, whichever is the lesser) at any time convene a meeting of Unitholders in accordance with the provisions of the Trust Deed.
The Unitholders cannot give any directions to the Manager or the Trustee (whether at a meeting of Unitholders or otherwise) if it would require the Trustee or the Manager to do or omit doing anything which may result in: the Trust ceasing to comply with the Listing Manual issued by the SGX-ST or the Property Funds Appendix; or the exercise of any discretion expressly conferred on the Trustee or the Manager by the Trust Deed or the determination of any matter for which the agreement of either or both the Trustee and the Manager is required under the Trust Deed.
A Unitholders liability is limited to the amount paid or payable for any Units. The provisions of the Trust Deed provide that no Unitholders will be personally liable to indemnify the Trustee or any creditor of the Trustee in the event that liabilities of the Trust exceed its assets.
90
13
NET ASSET VALUE PER UNIT

Net asset value per Unit is based on: Net assets 681,782
000
Total units issued and to be issued at 31 December 2011 (Note 12)
637,295
14
GROSS REVENUE
Gross rental income
76,945
15
PROPERTY EXPENSES
Land rent Maintenance expenses Property management fees Property tax Utilities Others
522 507 1,539 407 606 290 3,871
Property expenses represent the direct operating expenses arising from rental of investment properties.
ANNUAL REPORT 2011
91
16
FINANCE INCOME AND COSTS

Finance income from Commodity Murabaha deposits Tawidh (Compensation on late payment of rent) Finance income Finance costs: - Commodity Murabaha Facilities - Profit rate swaps Amortisation of transaction costs Brokerage and agent fees Finance costs Net financing costs
107 31 138
6,869 3,067 1,935 156 12,027 11,889
17
MANAGERS FEES Included in Managers fees of the Group and Trust is an aggregate of 4,495,453 Units, of which 3,345,601 Units were issued and another 1,149,852 Units will be issued, amounting to $4,058,000, as partial satisfaction of the Managers fees. No performance fee was payable for the current financial period.
18
DONATION OF NON-SHARIAH COMPLIANT INCOME The total amount of net income subjected to the cleansing process for the quarter ended 31 December 2011 was approved by the Independent Shariah Committee to be donated to the Singapore Red Cross Society for the Philippines Typhoon Washi Appeal. During the period, donations that were made and approved by the Independent Shariah Committee included The Straits Times School Pocket Money Fund, The Embassy of Japan, Singapore Kadayanullar Muslim League, the Islamic Religious Council of Singapore and the Singapore Red Cross Society for the South East Asia Flood Appeal.
19
OTHER TRUST EXPENSES Included in other trust expenses are:

Auditors remuneration audit fees non-audit fees Professional fees Other expenses
122 76 179 246 623
92
20
INCOME TAX EXPENSE

Tax expense Current period Reconciliation of effective tax rate Total return for the period before taxation and distribution Tax calculated using Singapore tax rate of 17% Non-tax deductible items Tax exempt income Tax transparency
88,242 15,001 2,198 (6,879) (10,320)
21
EARNINGS PER UNIT Basic earnings per Unit is based on:

Total return for the period after taxation
88,242
Number of Units 000
Weighted average number of Units beginning of the period issued as payment of Managers fees to be issued as payment of Managers fees payable in Units Weighted average number of Units
632,800 1,359 3 634,162
Diluted earnings per Unit is the same as the basic earnings per Unit as there are no dilutive instruments in issue during the period.
22
ISSUE EXPENSES Issue expenses comprise professional, advisory and underwriting fees and other cost related to the listing of the Trust and issuance of Units. Issue expenses include non-audit fees paid to the auditors of the Trust of $468,000 for acting as independent reporting accountant and other related work performed in connection with the Initial Public Offering of the Trust.
ANNUAL REPORT 2011
93
23
OPERATING SEGMENTS The operating segment information is based on the Groups internal reporting structure for the purpose of allocating resources and assessing performance by the Groups Chief Operating Decision Makers (CODM). Segment revenue comprises mainly of income generated from tenants. Segment property income represents the income earned by each segment after allocating property operating expenses. Segment assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly cash and cash equivalents, other receivables, borrowings and other payables. The Group has four reportable segments whose information is presented in the tables below. Geographical segments Segment information in respect of the Groups geographical segments is not presented as the Groups activities for the period ended 31 December 2011 related wholly to properties located in Singapore. Property income and expenses
Group and Trust 29 October 2010 to 31 December 2011 Chemical Warehouse & Warehouse & General Logistics Logistics Industrial $000 $000 $000
High-tech Industrial $000
Total $000
31 December 2011 Gross revenue Property operating expenses Segment net property income Net change in fair value of investment properties Finance income Finance cost Unallocated amounts: Other expenses Net change in fair value of derivatives Consolidated total return for the year before tax Assets and liabilities Segment assets Unallocated assets Total assets Segment liabilities Unallocated liabilities: borrowings others Total liabilities 44,892 (2,979) 41,913 30,626 12,009 (403) 11,606 4,100 15,339 (375) 14,964 4,506 4,705 (114) 4,591 144 76,945 (3,871) 73,074 39,376 138 (12,027) 100,561 (7,726) (4,593) 88,242
534,174
146,500
250,642
117,159
1,048,475 33,841 1,082,316 35,211 359,865 5,458 400,534
20,766
401
8,311
5,733
94
24
COMMITMENTS (a) The Trust is required to pay JTC Corporation (JTC) annual land rent in respect of certain properties. The annual land rent payable is based on the market land rent in the relevant year of the lease term. However, the lease agreements limit any increase in the annual land rent from year to year to 5.5% of the annual land rent for the immediate preceding year. The land rent paid/payable to JTC amounted to $4,293,000 in relation to 16 properties for the period ended 31 December 2011 (including amounts which have been recharged to the master lessees). (b) The Group and the Trust leases out its investment properties under operating lease agreements. Non-cancellable operating lease rentals receivable are as follows:
Within 1 year After 1 year but within 5 years
74,477 138,020 212,497
(c)
As at balance sheet date, the Group has entered into a contractual agreement with external parties to contemporaneously acquire and sell the equivalent amount of $352.8 million of commodities at the prevailing market price at pre-determined future dates till 26 November 2013 and 21 November 2014.
25
SIGNIFICANT RELATED PARTY TRANSACTIONS For the purposes of these financial information, parties are considered to be related to the Group and Trust if the Manager (as manager of the Trust) has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Manager and the party are subject to common significant influence. Related parties may be individuals or other entities. The Manager and Property Manager are subsidiaries of a significant Unitholder of the Trust. In the normal course of its business, the Trust carried out transactions with related parties on terms agreed between the parties. During the financial period, in addition to those disclosed elsewhere in the financial statements, there were the following significant related party transactions:
Group and Trust Transaction Balance value for the outstanding period ended as at 31 December 2011 31 December 2011 $000 $000
Purchase of investment properties from a sponsor and its related companies Rental income received/receivable from a sponsor and its related companies Acquisition fees paid/payable to the Manager Management fees and reimbursables paid/payable to the Manager Property management fees and reimbursables paid/payable to the Property Manager Inception fees paid to the Trustee and capitalised as issue expenses Trustee fees paid/payable to the Trustee
192,950 16,612 8,055 5,072 1,539 40 407
7 1,249 262 71
ANNUAL REPORT 2011
95
26
FINANCIAL RATIOS
31 December 2011 %
Ratio of expenses to weighted average net assets(1) including performance component of Managers fees excluding performance component of Managers fees Portfolio turnover rate(2)
0.91 0.91
(1) The annualised ratios are computed in accordance with the guidelines of Investment Management Association of Singapore. The expenses used in the computation relate to expenses of the Group, excluding property expenses, profit rate expense and income tax expense. (2) The annualised ratio is computed based on the lesser of purchases or sales of underlying investment properties of the Group expressed as a percentage of daily average net asset value.
27
FINANCIAL RISK MANAGEMENT (a) Capital management The Group reviews its capital management policy regularly so as to optimise the Groups and the Trusts funding structure. The Group also monitors its exposures to various risk elements and externally imposed requirements by closely adhering to clearly established management policies and procedures. The primary objective of the Groups capital management is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximise Unitholders value. In order to maintain or achieve an optimal capital structure, the Group and Trust will endeavour to employ an appropriate mix of debt and equity in financing acquisitions and assets enhancements, and utilise profit rate and currency hedging strategies where appropriate. The Manager reviews this policy on a continuous basis. The Trust and its subsidiary are subject to the aggregate leverage limit as defined in the Property Fund Guidelines of the CIS Code. The CIS Code stipulates that the total borrowings and deferred payments (together the Aggregate Leverage) of a property fund should not exceed 35.0% of its deposited property except that the Aggregate Leverage of a property fund may exceed 35.0% of its deposited property (up to a maximum of 60.0%) if a credit rating of the property fund from Fitch Inc., Moodys or Standard and Poors is obtained and disclosed to the public. The property fund should continue to maintain and disclose a credit rating so long as its Aggregate Leverage exceeds 35.0% of its deposited property. For this financial period, Standard and Poors has assigned a long term corporate credit rating of BBB- and axA- ASEAN scale rating with a stable outlook for the Trust. The Trust has complied with the Aggregate Leverage limit during the financial year. There were no changes in the Groups approach to capital management during the financial year. As at balance sheet date, the gross amounts of borrowings and retention sums as a percentage of total assets and net assets are 34.1% and 54.1% respectively.
96
27
FINANCIAL RISK MANAGEMENT (continued) (b) Risk management framework The Groups activities expose it to market risk (including profit rate risk), credit risk and liquidity risk. This note presents information about the Groups exposure to each of the above risks, the Groups objectives, policies and processes for measuring and managing risk, and the Groups management of capital. Risk management is integral to the whole business of the Group and the Trust. The Manager of the Trust has implemented a system of controls in place to create an acceptable balance between the benefits derived from managing risks and the cost of managing those risks. The Manager also monitors the Trusts risk management process closely to ensure an appropriate balance between control and business objectives is achieved. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Trusts strategic direction. The Audit Committee of the Manager oversees how management monitors compliance with the Trusts risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the Trusts exposure to those risks. The Audit Committees oversight role is assisted by an internal audit function which is outsourced to an independent professional firm (Internal Audit). Internal Audit undertakes both regular and ad-hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee. (c) Credit risk Credit risk is the potential financial loss to the Group resulting from the failure of a tenant or counterparty of the Group, to settle its financial and contractual obligations, as and when they fall due. The carrying amount of financial assets represents the maximum credit risk exposure. The maximum exposure to credit risk at the reporting date was:
Loans and receivables Cash and cash equivalents
1,651 31,822 33,473
The Manager has an established process to evaluate the creditworthiness of its tenants and prospective tenants to minimise potential credit risk. Credit evaluations are performed by the Property Manager before lease agreements are entered into with prospective tenants. Security in the form of bankers guarantees, insurance bonds or cash security deposits are obtained prior to the commencement of the lease. As such, the Manager believes that no impairment allowance is necessary in respect of the loans and receivables as these amounts mainly arise from tenants who have good payment records and have placed sufficient security with the Group and Trust in the form of bankers guarantees or cash security deposits. The Group establishes an allowance account for impairment that represents its estimate of losses in respect of loans and receivables. The main component of this allowance is estimated losses that relate to specific tenants or counterparties. The allowance account is used to provide for impairment losses. Subsequently when the Group is satisfied that no recovery of such losses is possible, the financial asset is considered irrecoverable and the amount charged to the allowance account is then written off against the carrying amount of the impaired financial asset.
ANNUAL REPORT 2011
97
27
FINANCIAL RISK MANAGEMENT (continued) (c) Credit risk (continued) The ageing of trade receivables that were not impaired at the reporting date was:
Group and Trust $000
2011 Not past due Past due 1 - 30 days Past due 31 - 60 days Past due 61 90 days
3 259 101 121 484
The Group and the Trust believe that all amounts which are past due are collectible, based on historic payment behaviour and the retention of sufficient security in the form of bankers guarantees or cash security deposits from tenants, and hence no impairment allowance is necessary in respect of trade receivables not past due or past due by up to 90 days. Cash at bank is placed with a financial institution which is regulated. The Group limits its credit risk exposure by dealing with counterparties that have sound credit ratings. Given these high credit ratings, management does not expect any counterparty to fail to meet its obligations. As at balance sheet date, there were no significant concentrations of credit risk. (d) Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Groups approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Groups and Trusts reputation. The Manager monitors and maintains a level of cash and cash equivalents deemed adequate to finance the Groups and Trusts operations and to mitigate the effects of fluctuations in cash flows. In addition, the Manager also monitors and observes the Code of Collective Investment Schemes issued by the MAS concerning limits on total borrowings. The Group also has a committed $364.8 million secured Commodity Murabaha Facilities with a panel of banks (see Note 10) which were fully utilised as at balance sheet date. Profit will be payable at the Singapore swap offer rate.
98
27
FINANCIAL RISK MANAGEMENT (continued) (d) Liquidity risk (continued) The following are the expected contractual undiscounted cash flows of financial liabilities, including estimated profit payments and excluding the impact of netting agreements:
Cash ows Carrying amount $000 Contractual cash flows $000 Within 1 year $000 Within 1 to 5 years $000
Group and Trust 31 December 2011 Non-derivative financial liabilities Borrowings^ Trade and other payables
359,865 36,076 395,941
(387,174) (36,076) (423,250)
(22,451) (15,562) (38,013)
(364,723) (20,514) (385,237)
Derivative financial liabilities Profit rate swaps (net-settled)

^
4,593
(6,628)
(3,127)
(3,501)
For the purpose of the contractual cash flows calculation, weighted average SOR of 0.37% was used.
The maturity analyses show the undiscounted cash flows of the Group and the Trusts financial liabilities on the basis of their earliest possible contractual maturity. For derivative financial instruments, the cash inflows/(outflows) represent the contractual undiscounted cash flows relating to these instruments. The amounts are compiled on a net basis for derivatives that are net-settled. It is not expected that the cash flows included in the maturity analysis of the Group and the Trust could occur significantly earlier, or at significantly different amounts. (e) Market risk Market risk is the risk that changes in market prices, such as profit rates, foreign exchange rates and equity prices will affect the Groups and Trusts total return or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Group and the Trust do not have any exposure to foreign exchange rates and equity prices risks. (f) Profit rate risk The Groups exposure to fluctuations in profit rates relates primarily to borrowings. Profit rate risk is managed on an on-going basis with the primary objective of limiting the extent to which net profit expense could be affected by adverse movements in profit rates. As at 31 December 2011, the Group had entered into profit rates swaps with total notional contract amount of $352.8 million whereby the Group has agreed with counterparties to exchange, at specified intervals, the difference between the floating rate pegged to the Singapore dollar SOR and fixed rate profit amounts calculated by reference to the agreed notional amounts of the borrowings.
ANNUAL REPORT 2011
99
27
FINANCIAL RISK MANAGEMENT (continued) (f) Profit rate risk (continued) As at 31 December 2011, the profit rate profile of variable profit-bearing financial instruments was:
Group and Trust Carrying amount 2011 $000
Variable rate instruments Financial liabilities*

* net of effect of profit rate swaps
(11,918)
Fair value sensitivity analysis for xed rate instruments The Group does not account for any fixed rate financial liabilities at fair value through Statement of Total Return. Therefore a change in profit rates at the reporting date would not affect the Statement of Total Return. Cash ow sensitivity analysis for variable rate instruments A change of 50 basis points (bp) in profit rate at the reporting date would increase/(decrease) total return and Unitholders funds by the amounts shown below. This analysis assumes that all other variables remain constant.
Total return 50 bp increase $000 50 bp decrease $000 Unitholders funds 50 bp 50 bp increase Decrease $000 $000
Group and Trust 31 December 2011 Financial liabilities
(60)
60
(60)
60
(g)
Fair value of financial instruments A number of the Groups accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, other than those disclosed elsewhere in these financial statements, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
100
27
FINANCIAL RISK MANAGEMENT (continued) (g) Fair value of financial instruments (continued) (i) Derivatives nancial liabilities The fair value of profit rate swaps is based on broker quotes. These quotes are tested for reasonableness by discounting estimated future cash flows based on the terms and maturity of each contract and using market profit rates for a similar instrument at the measurement date. Fair values reflect the credit risk of the instrument and include adjustments to take into account of the credit risk of the Group and Trust, and counterparty when appropriate. (ii) Borrowings The carrying amounts of profit-bearing borrowings which are repriced within 3 months from the balance sheet date approximate the corresponding fair values. (iii) Other nancial assets and liabilities The carrying amounts of financial assets and liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalents, and trade and other payables) are assumed to approximate their fair values because of the short period to maturity. All other financial assets and liabilities approximate their fair values as at balance sheet date. Fair value hierarchy The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
Level 1 $000
Level 2 $000
Level 3 $000
Total $000
Group and Trust 31 December 2011 Derivative liabilities Profit rate swaps
4,593
4,593
ANNUAL REPORT 2011
101
27
FINANCIAL RISK MANAGEMENT (continued) (g) Fair value of financial instruments (continued) During the financial period ended 31 December 2011, there were no transfers from Level 1, Level 2 or Level 3, or vice versa.
Other financial liabilities within the scope of FRS 39 $000
Note
Designated at fair value $000
Loans and receivables $000
Total carrying amount $000
Total fair value $000
Group and Trust 31 December 2011 Trade and other receivables Cash and cash equivalents 7 8 1,651 31,822 33,473 1,651 31,822 33,473 1,651 31,822 33,473
Trade and other payables, excluding security deposits and retention sums Security deposits Retention sums Borrowings Financial derivatives
9 9 9 10 11
4,593 4,593
11,182 10,308 3,751 359,865 385,106
11,182 10,308 3,751 359,865 4,593 389,699
11,108 9,612 3,751 365,403 4,593 394,467
Prot rates used for determining fair value The Group and the Trust used the following rate to discount estimated cash flows:
Group and Trust 2011 %
Non-current portion of security deposits and borrowings
2.86
28
COMPARATIVE INFORMATION No comparative figures are presented as this is the first set of financial statements prepared by the Trust since it was established on 29 October 2010.
29
SUBSEQUENT EVENTS Subsequent to period ended 31 December 2011, the Manager declared a distribution of 2.17 cents per unit in respect of the period from 1 October 2011 to 31 December 2011.
102
Statistics of Unitholdings
ISSUED AND FULLY PAID UP UNITS

As at 29 February 2012 Date Events Number of Units Amount (S$) Price (S$)
26 November 2010 29 April 2011
Initial public offering Payment of management fee by way of issue of Units Payment of management fee by way of issue of Units Payment of management fee by way of issue of Units Payment of management fee by way of issue of Units Total Units outstanding
632,800,000 1,317,085
664,440,000 1,232,923
1.05000 0.9361
29 July 2011
952,277
883,904
0.9282
27 October 2011
1,076,239
941,817
0.8751
27 January 2012
1,149,852
998,876
0.8687
637,295,453
There were 637,295,453 Units (voting rights: one vote per Unit) outstanding as at 29 February 2012. There is only one class of Units in Sabana Shariah Compliant REIT. Market capitalisation S$589.5 million (based on market closing price of S$0.925 on 29 February 2012).
DISTRIBUTION OF UNITHOLDINGS
As at 29 February 2012 Size of Unitholdings No. of Unitholders % of Unitholders No. of Units % of Units
1 - 999 1,000 - 10,000 10,001 - 1,000,000 1,000,001 and above Total
8 8,395 2,607 32 11,042
0.07 76.03 23.61 0.29 100.00
2,571 35,080,504 129,189,802 473,022,576 637,295,453
0.00 5.51 20.27 74.22 100.00
ANNUAL REPORT 2011
103
20 LARGEST UNITHOLDERS
As at 29 February 2012 No. Name No. of Units % of Units
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
HSBC (Singapore) Nominees Pte Ltd United Overseas Bank Nominees Pte Ltd Citibank Nominees Singapore Pte Ltd DBS Vickers Securities (S) Pte Ltd Meren Pte Ltd Morgan Stanley Asia (Singapore) Securities Pte Ltd DBS Nominees Pte Ltd Innotek Limited DBSN Services Pte Ltd Raffles Nominees (Pte) Ltd DB Nominees (S) Pte Ltd Sabana Real Estate Investment Management Pte Ltd Bank of Singapore Nominees Pte Ltd Vibrant Capital Pte Ltd Phillip Securities Pte Ltd UOB Kay Hian Pte Ltd Daiwa Capital Markets Singapore Ltd OCBC Nominees Singapore Pte Ltd Ong Chu Meng Unisysco Holdings (S) Pte Ltd Total
155,781,122 75,317,600 57,989,620 39,376,000 23,809,000 18,268,000 16,209,837 15,000,000 12,760,000 10,285,879 6,327,334 4,495,453 4,060,000 3,900,000 3,024,072 2,388,000 2,373,000 2,038,000 2,000,000 1,992,000 457,394,917
24.44 11.82 9.10 6.18 3.74 2.87 2.54 2.35 2.00 1.61 0.99 0.71 0.64 0.61 0.47 0.37 0.37 0.32 0.31 0.31 71.75
104
UNITHOLDINGS OF THE DIRECTORS OF THE MANAGER

(As recorded in the Register of Directors Unitholdings as at 21 January 2012) Direct interest Directors No. of Units %(1) Deemed interest No. of Units %(1)
Steven Lim Kok Hoong Yong Kok Hoon(2) Kevin Xayaraj(3) Henry Chua Tiong Hock Associate Professor Muhammad Faishal Bin Ibrahim Khan Surattee Ng Shin Ein
1,050,000 3,345,601 -
0.17 0.53 -
Notes: (1) The percentage interest is based on total issued Units of 636,145,601 as at 21 January 2012. (2) Yong Kok Hoon is deemed to have an interest in the units held by his spouse, Ong Lee Choo. (3) Kevin Xayaraj is deemed to have an interest in the units held by Sabana Real Estate Investment Management Pte. Ltd. by virtue of Section 7 of Companies Act.
SUBSTANTIAL UNITHOLDERS
(As recorded in the Register of Substantial Unitholdings as at 29 February 2012) Direct interest Substantial Unitholders No. of Units %(1) Deemed interest No. of Units %(1)
Al Salam Bank Bahrain BSC Singapore Enterprises Private Limited Freight Links Express Holdings Limited(2) Vibrant Capital Pte Ltd(3) Khua Hock Su
(4) (5)
32,651,000 38,352,000 9,083,000 3,900,000 1,229,000 9,088,000
5.12 6.02 1.43 0.61 0.19 1.42
38,352,000 47,435,000 51,335,000 51,335,000
6.02 7.44 8.06 8.06
Khua Kian Keong
Notes: (1) The percentage interest is based on total issued Units of 637,295,453 as at 29 February 2012. (2) Freight Links Express Holdings Limited (Freight Links) is deemed to have an interest in the units held by Singapore Enterprise Private Limited (Singapore Enterprise), a direct wholly-owned subsidiary of Freight Links. (3) Vibrant Capital Pte Ltd (Vibrant Capital) is deemed to have an interest in the units held by Freight Links and Singapore Enterprise. (4) Khua Hock Su is deemed to have an interest in the units held by Freight Links, Singapore Enterprise and Vibrant Capital. (5) Khua Kian Keong is deemed to have an interest in the units held by Freight Links, Singapore Enterprise and Vibrant Capital.
FREE FLOAT Under Rule 723 of the Listing Manual, a listed issuer must ensure that at least 10.00% of its listed securities are at all times held by the public. Base on information available to the Manager as at 29 February 2011, 85.95% of the Units in Sabana Shariah Compliant REIT are held in the hands of public. Accordingly, Rule 723 of the Listing Manual has been complied with.
ANNUAL REPORT 2011
105
Additional Information
RELATED PARTY TRANSACTIONS Interested person (as defined in the Listing Manual of the SGX-ST) and interested party (as defined in the Property Funds Appendix) transactions (collectively Related Party Transactions) during the financial period are as follows.
Aggregate value of all related party transactions during the financial period under review (excluding transactions less than $100,000) S$000
Name of Related Party
FREIGHT LINKS EXPRESS HOLDINGS LIMITED AND ITS SUBSIDIARIES
Acquisition consideration Lease related income Acquisition fees Managers fees Property management fees
HSBC INSTITUTIONAL TRUST SERVICES (SINGAPORE) LIMITED
192,950 16,612 8,055 5,072 1,539
Trustees fees
407
There are no transactions conducted under Unitholders mandate pursuant to Rule 920 during the financial period under review.
106
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Sabana Shariah Compliant REIT 151 Lorong Chuan, #02-03 New Tech Park Singapore 556741 Tel +65 6580 7750 Fax +65 6280 4700 www.sabana-reit.com

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AB VE BEY ND

SABANA SHARIAH COMPLIANT REIT

Sabana Shariah Compliant REITs Properties at A Glance

Structure of Sabana Shariah Compliant REIT

INDEPENDENT SHARIAH COMMITTEE

Management t services MANAGER(1) Management t fees SABANA SHARIAH COMPLIANT REIT

Trustee fee TRUSTEE Acts on behalf of unitholders

Net property income

SABANA TREASURY PTE. LTD.

A whollyowned o subsidiary for s the t provision of o treasury services s

ANNUAL REPORT 2011

2010 / 2011 Signicant Events

27 April 2011 26 February 2011

SABANA SHARIAH COMPLIANT REIT

ANNUAL REPORT 2011

Key Financial Figures

76,945 73,074 60,603 9.53 8.67 8.26 9.91

75,460 72,294 60,092 9.48 8.63 8.22 9.86

2.0 1.1 0.9 0.5 0.5 0.5 0.5

Selected Balance Sheet Data

1,082,316 359,865 681,782 637,295 1.07 1.05

884,636 215,126 627,769 632,800 0.99 0.99

22.3 67.3 8.6 0.7 8.1 6.1

Unit Price Performance(4)

34.1% S$364.8 million 96.7% 4.4% 2.2 years 7.4 times

1.050 0.990 0.875 1.030 0.835 549.72 -11.6%

ANNUAL REPORT 2011

Letter from Chairman & CEO

Mr Steven Lim Kok Hoong Chairman and Independent Non-executive Director

Mr Kevin Xayaraj Co-founder, Chief Executive Officer and Executive Director

Performing Above Expectations

Increasing Our Value

Keeping Occupancy High

SABANA SHARIAH COMPLIANT REIT

Unit price performance(1)

Securing New Funding Options

FTSE ST RE INV EST TRUST FTSE Straits Times Index

Sabana Shariah Compliant REIT

Ftse St Re Invest Trust

Sabana Shariah Compliant Reit

% Change since IPO % Change in 2011

Broadening Our Investor Base

Addressing The Unit Price

ANNUAL REPORT 2011

Letter from Chairman & CEO

Looking to The Future

Working on The Fundamentals

SABANA SHARIAH COMPLIANT REIT

Operations & Financial Review

Solid Balance Sheet

Prudent Capital Management

Cumulative DPU (cents) 26 November 2010 to 31 December 2011

Operations & Financial Review

Prot Rate Risk Management

Valuation by Asset Class(5)

534.5 146.5 170.2 50.1 901.3

498.7 141.0 163.0 48.5 851.2

Comfortable Debt Headroom

Signicant Progress in Portfolio Build-up Since IPO

Debt Prole as at 31 December 2011

Improved Diversication: Asset Type, Lease Structure & Customer Base

100.3 12.0 2011 2012 2013 2014

Initial Portfolio Revalued Upwards