Warburg Pincus-backed e-Shang Redwood (ESR) is in advanced talks to buy struggling Sabana Shariah Compliant Industrial REIT, sources familiar with the process said, in a likely first consolidation step in Singapore’s $3.5 billion mid-cap industrial trusts sector.

ESR, an Asian logistics developer, has been conducting due diligence on Sabana REIT and is set to complete its talks in a few months, said the sources. They, however, said ESR has not yet agreed on terms of a deal.

Sabana’s units jumped 10 percent to their highest in nearly four months on Monday before the company asked for a trading halt. More than 6.5 million units were traded, seven times the 30-day average volume.

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