Scrip Dividend
How scrip dividends work for Singapore REITs and stocks — pros, cons, dilution risk, and whether you should elect scrip or cash in 2026.
A scrip dividend (also called a scrip dividend scheme or dividend reinvestment plan) gives shareholders the option to receive their dividend in the form of new shares instead of cash. In Singapore, several S-REITs and blue chip companies offer scrip dividends, typically at a small discount to the market price. Electing scrip increases your shareholding but also dilutes existing unitholders who take cash.
Not financial advice. All figures are for educational reference only. Data as at Q1 2026 unless noted.
Table of Contents
What Is a Scrip Dividend?
A scrip dividend scheme allows shareholders or unitholders to elect to receive new shares or units instead of a cash dividend. The company or REIT issues new shares to investors who choose the scrip option, typically at a discount of 1–5% to the volume-weighted average price (VWAP) around the ex-dividend date. Investors who do not elect scrip receive their dividend in cash as usual.
The term “scrip” comes from the historical practice of issuing certificates (scrips) for fractional shares. Today, the process is electronic. When a company declares a dividend with a scrip option, you receive a notice (via CDP or your broker) asking whether you want cash or scrip. You must respond by the election deadline. If you do not respond, you typically receive cash by default (though some schemes default to scrip — always check the specific terms).
Scrip dividends are common among S-REITs and Singapore’s three major banks (DBS, OCBC, UOB). For REITs, scrip dividend schemes are particularly popular because they help the REIT manager conserve cash for acquisitions, debt repayment, or asset enhancement initiatives (AEIs) while still meeting the 90% distribution requirement. For investors, scrip offers a way to compound your holdings without paying brokerage fees.
How It Works
When a scrip dividend is offered, the issuer sets a scrip price based on the VWAP of the shares over a specified period (usually 5–10 trading days) around the ex-dividend date, minus a discount (typically 1–2.5% for S-REITs). Your dividend entitlement in dollars is divided by the scrip price to determine how many new shares or units you receive. Any fractional amount is paid in cash.
For example, if your total dividend is S$500 and the scrip price is S$1.95 per unit (after a 2% discount from the VWAP of S$1.99), you receive 256 new units (S$500 / S$1.95 = 256.41, rounded down) and S$0.80 in cash for the fractional unit. Your total holding increases by 256 units at no brokerage cost, and at a slight discount to market price.
The key trade-off is dilution. When new units are issued via scrip, the total number of units outstanding increases. If you elect cash, your percentage ownership of the REIT decreases slightly because new units are being created for scrip-electing investors. Over multiple distribution periods with high scrip take-up rates (some S-REITs see 30—50% take-up), the cumulative dilution can noticeably reduce DPU per unit, even if total distributable income grows. This is the most common criticism of scrip dividend schemes among S-REIT investors.
Scrip Dividends in Singapore
Several major S-REITs operate permanent scrip dividend schemes, including Mapletree Logistics Trust (MLT), Mapletree Industrial Trust (MIT), Mapletree Pan Asia Commercial Trust (MPACT), CapitaLand Integrated Commercial Trust (CICT), and Ascendas REIT. The Mapletree REITs have been among the most active scrip issuers, with take-up rates often exceeding 30–40%. CICT’s scrip scheme typically offers a 1–2% discount and sees moderate take-up.
Among blue chips, DBS Group has offered a scrip dividend scheme at various points, allowing shareholders to receive new DBS shares in lieu of cash dividends. UOB and OCBC have also operated scrip schemes, though availability varies by dividend period. Bank scrip schemes tend to have lower take-up rates because many retail investors prefer the regular cash income.
From a regulatory perspective, scrip dividends in Singapore are not subject to additional taxes. Since there is no dividend withholding tax in Singapore, both cash and scrip dividends are received tax-free by Singapore tax residents. The new units received via scrip have a cost basis equal to the scrip price for capital gains calculation purposes (relevant mainly for institutional investors or those with tax obligations in other jurisdictions).
Real-World Examples
Mapletree Logistics Trust (MLT) offers a scrip dividend scheme that has been active since 2015. In a typical distribution period, MLT might declare a DPU of S$0.02275 per unit. A unitholder with 10,000 units would be entitled to S$227.50. If the scrip price is S$1.55 per unit (after the discount), they receive 146 new units and S$1.20 in cash. Their holding grows from 10,000 to 10,146 units — a 1.46% increase in holdings at below-market cost. Over multiple years, this compounding effect can be significant.
However, the dilution is real. If MLT’s total units outstanding grow by 2–3% per year through scrip issuance, the total pie of distributable income must grow by at least that much just to maintain the same DPU. If income growth lags unit growth, DPU per unit falls — penalising investors who elected cash and saw their proportional claim on income diluted.
For comparison, Keppel DC REIT does not offer a scrip dividend scheme, meaning all distributions are in cash and there is no ongoing unit dilution. Investors who prioritise DPU stability often prefer REITs without scrip schemes, while those focused on long-term compounding may favour scrip as a no-cost way to accumulate more units. See the Best S-REITs 2026 analysis for a comparison of distribution policies.
Why It Matters for Investors
For passive income investors in Singapore, the scrip vs cash decision is a recurring choice. If you need the cash income to fund living expenses or reinvest in other opportunities, taking cash is straightforward. If you are in the accumulation phase and want to compound your REIT holdings without paying brokerage, scrip can be attractive — especially when offered at a discount.
When modelling your portfolio income with the TKN Dividend Calculator, be aware that dividend yields reported in the market are based on cash DPU. If you elect scrip, your effective income is in units, not cash — your yield is the same on paper but your actual cash receipt is lower (zero for the scrip portion). Factor this into your income planning.
A balanced approach: consider electing scrip on REITs where you are most bullish on long-term NAV growth, and taking cash on REITs where you want the income or where unit dilution is a concern. Always check the scrip take-up rate in the REIT’s announcements — a consistently high take-up rate (40%+) signals meaningful ongoing dilution that may weigh on future DPU per unit.
Frequently Asked Questions
What is a scrip dividend in Singapore?
A scrip dividend lets you receive new shares or REIT units instead of cash dividends, usually at a 1–5% discount to the market price. It is offered by several S-REITs and banks in Singapore. You elect scrip or cash before each distribution — default is usually cash if you do not respond.
Should I take scrip or cash dividends?
Take scrip if you want to compound your holdings without brokerage fees and do not need the cash income. Take cash if you need the income for expenses, want to reinvest in other assets, or are concerned about unit dilution. Many investors take a mixed approach depending on the REIT.
Does a scrip dividend reduce DPU?
Scrip dividends increase total units outstanding, which dilutes DPU if distributable income does not grow proportionally. A high scrip take-up rate (30–50%) over multiple years can noticeably reduce DPU per unit. This is why some investors prefer REITs without scrip schemes.
Are scrip dividends taxable in Singapore?
No. Since Singapore has no dividend withholding tax, both cash and scrip dividends are tax-free for Singapore tax residents. The new shares received via scrip have a cost basis equal to the scrip issue price, which matters only for capital gains tracking in foreign tax jurisdictions.
Which Singapore REITs offer scrip dividends?
Major S-REITs with active scrip schemes include Mapletree Logistics Trust, Mapletree Industrial Trust, Mapletree Pan Asia Commercial Trust, CapitaLand Integrated Commercial Trust, and Ascendas REIT. DBS, OCBC, and UOB have also offered bank scrip schemes at various times. Check each entity’s latest distribution announcement for scrip availability.
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