Listed Property Trusts

[Snoopy]

Also when considering those companies that have Dividend Reinvestment Plans with high shareholder uptake, they likely have ample scope to maintain dividend (if they choose). Technically projecting 100% payout ratios of FFO, but of course paying out much less in reality as people accept shares instead of cash.

Those DRPs of course lead to some dilution, capital raises by stealth, but fairly common.

Yes another good point. The problem with DRPs is that by issuing more shares, and saving some immediate cashflow out, the company is reducing the earnings per share for future tax periods 'ad infinitum'. IOW they are kicking the 'cashflow balance can' 'down the road'.

This kind of behaviour is particularly egregious in the case of Investore that on 11/07/2022 commenced a share buyback that was paused om 08-09-2022 after shares had been bought back within the $1.65 to $1.75 price band. Yet on 28th June 2023, Investore announced a 'dividend reinvestment plan' for a share that went ex-dividend on 6th September 2023, with shares issued based on a 5 day weighted average share price of all trades after going ex-dividend. That DRP share price looks to be $1.26, and maybe lower if a discount applies. This is a terrible result for shareholders not in the DRP as the board has 'bought existing shares high' and is 'selling new shares low', destroying shareholder capital at a time the company needs it and diluting the value of the existing shareholder base forever going forwards.

For a 'no to low growth company', as most of these collective property ownership PIEs are, I would say DRPs are bad news for unit holders over the long term.

SNOOPY