Dividend Reinvestment Plan
DRP and DRIP Explained for Singapore Investors — Singapore investing guide with key metrics, examples and 2026 data.
A Dividend Reinvestment Plan (DRP or DRIP) is an optional scheme offered by some SGX-listed companies and REITs that allows shareholders to receive new shares instead of a cash dividend, typically at a discounted issue price. Participating shareholders grow their holdings without paying brokerage fees.
Not financial advice. All figures are for educational reference only. Data as at Q1 2026 unless noted.
Table of Contents
What Is Dividend Reinvestment Plan?
A Dividend Reinvestment Plan (DRP) is a corporate scheme giving shareholders a choice when a dividend is declared: receive the dividend as cash, or use those funds to receive new shares at a discounted price. DRPs are common among Singapore-listed REITs, business trusts, and some blue-chip companies.
For the company or REIT, DRPs are a capital-retention tool. By issuing new shares instead of distributing cash, the entity retains more capital for operations, debt repayment, or acquisitions. For investors, DRPs offer a convenient, low-cost way to compound holdings without incurring brokerage fees — shares are issued directly.
The terms of each DRP differ. Some plans offer shares at a fixed discount to the volume-weighted average price (VWAP) over a set period. Others issue at market price with no discount. Investors should always read the DRP announcement carefully to understand the issue price and election deadline before deciding.
How It Works
A typical S-REIT DRP works as follows: (1) The REIT announces its DPU and DRP terms, including the issue price calculation method; (2) Unitholders have an election window (typically 2-3 weeks) to opt into the DRP; (3) New units are priced at a specified discount to VWAP (e.g. 5% below 5-day VWAP); (4) Opted-in unitholders receive new units instead of cash on the payment date; (5) Where the DRP results in fractional units, the remaining cash is paid out in cash.
Example: You hold 10,000 units of a REIT paying S$0.03 DPU. Without DRP, you receive S$300 cash. If you opt into DRP and the issue price is S$1.00 per unit (5% discount to market price of S$1.05), you receive 300 new units instead of S$300 cash — buying at S$1.00 versus the market’s S$1.05, a 5% saving on each new unit acquired.
Dividend Reinvestment Plan in Singapore
DRPs are common across Singapore’s S-REIT sector. Notable REITs that have offered DRPs include Mapletree Logistics Trust (MLT), Ascendas REIT (AREIT), Keppel REIT, and Suntec REIT. During periods of market stress or when REITs need to conserve cash (e.g. post-COVID in 2020-2021), DRP participation rates tend to rise as retail investors see value in accumulating units at discounted prices.
MAS regulations require S-REITs to publish offer information statements for DRP share issuances above certain thresholds. From a tax perspective, Singapore individual investors generally do not pay income tax on S-REIT distributions received via DRP. The new units are treated as acquisitions at the DRP issue price — relevant for cost basis tracking, though Singapore currently does not tax capital gains for most retail investors.
Real-World Examples
In 2023, Mapletree Logistics Trust (MLT) conducted a DRP for its quarterly distribution of S$0.02178 per unit. Unitholders who elected to participate received new units at S$1.56 per unit, a 4% discount to the prevailing VWAP. A unitholder with 50,000 units had an entitlement of S$1,089, translating to approximately 698 new units under DRP.
Keppel REIT has also run DRPs periodically, offering new units at 2-5% discount to VWAP. These DRPs allowed long-term investors to compound their exposure to Singapore Grade-A office assets without incurring brokerage costs — a meaningful saving given the recurring nature of REIT distributions (2-4x per year).
Why It Matters for Investors
DRPs are a powerful compounding tool for long-term dividend investors in Singapore. By reinvesting distributions automatically at a discount to market price, investors benefit from unit cost averaging and avoid the cash drag of uninvested dividends between distribution dates.
However, DRP participation is not always optimal. In a falling market, reinvesting at a discounted price that remains above where the market subsequently trades is suboptimal versus taking cash and redeploying later. DRPs also increase your unit count, which can make portfolio tracking more complex.
For disciplined dividend investors, DRPs complement a strategy of regular dividend yield calculation and long-term REIT holding. See our Best S-REITs 2026 guide to identify REITs with strong DRP track records. For broader context, read our glossaries on DPU and Dividend Yield.
Frequently Asked Questions
What is a DRP in Singapore REITs?
DRP stands for Dividend Reinvestment Plan (also called DRIP). It is a scheme offered by some S-REITs and companies allowing investors to receive new units or shares instead of a cash dividend. New units are usually issued at a small discount to the prevailing market price, giving participating investors a cost advantage on each new unit acquired.
Is it better to take DRP or cash dividend in Singapore?
It depends on your goals and market outlook. DRP makes sense if you are in accumulation mode, the issue price represents a genuine discount, and you plan to hold long-term. Taking cash is better if you need the income, want to deploy capital elsewhere, or if the REIT’s unit price has already fallen below the DRP issue price.
Do I pay tax on DRP units received in Singapore?
Generally, no. Singapore individual investors do not pay income tax on S-REIT distributions received as units under DRP. The new units are treated as acquired at the DRP issue price. Singapore does not currently tax capital gains for most retail investors, so subsequent sales are typically tax-free.
How do I opt into a DRP in Singapore?
During the DRP election period (typically 2-3 weeks after the distribution announcement), notify your broker or submit a DRP election form through CDP or your brokerage’s online platform. Each REIT specifies its own election process and deadline. Missing the deadline means you receive cash by default.
Can I participate in DRP through a brokerage custodian account?
Yes, most major Singapore brokerages (DBS Vickers, Phillip Securities, Tiger Brokers, etc.) support DRP elections for custodian account holders. The process may differ slightly from CDP direct account holders — check with your broker. Some brokers automatically pass through DRP entitlements; others require you to manually opt in.
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