Scrip Dividend vs Cash Dividend Singapore: Key Differences Explained
Definition: A scrip dividend gives shareholders the choice to receive additional shares or REIT units instead of a cash dividend. In Singapore, scrip dividends are offered by many S-REITs as a capital management tool, allowing investors to reinvest dividends without brokerage fees.
This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial adviser before making investment decisions. Data current as at Q1 2026.
Table of Contents — Scrip Dividend vs Cash Dividend Singapore: Key Differences Explained
- What Is a Scrip Dividend in Singapore?
A scrip dividend (also called a stock dividend or Dividend Reinvestment Plan, DRP) gives shareholders the option to receive new shares or REIT units as their dividend, instead of cash. For Singapore S-REITs, scrip dividends are particularly common during periods when the REIT needs to conserve cash for debt repayment, capital expenditure, or growth acquisitions.
When a company announces a scrip dividend, shareholders receive a circular with the election: take the distribution in cash (the default if you do nothing), or elect to receive new units at a specified price — typically a slight discount to the current market price, making scrip slightly more attractive than cash on a per-unit basis.
How Are Scrip Dividend Prices Set?
The scrip issue price is typically calculated as a 2–5% discount to the volume-weighted average price (VWAP) of the REIT’s units over a defined pricing period (e.g., 5 trading days post-announcement). This discount incentivises shareholders to elect scrip over cash. For example, if the scrip price is SGD 1.90 and the market price is SGD 2.00, you receive units worth more than the equivalent cash dividend — but new units being issued dilutes the existing unit base.
Key Differences: Scrip vs Cash Dividend
Feature Scrip Dividend Cash Dividend Receipt New shares/units Cash Price 2–5% discount to market Full cash DPU at declared rate Dilution Yes — new units issued No dilution Brokerage fees None (direct issuance) None Flexibility Low — you hold units, not cash High — reinvest or spend freely REIT Cash Flow REIT conserves cash REIT pays out cash Tax (SG individuals) Not taxable Not taxable Is Scrip Dilutive? Understanding the DPU Impact
Yes — scrip dividends are dilutive. When new units are issued, the total unit count increases. If distributable income does not grow proportionally, DPU per unit declines. However, if the REIT uses retained cash to fund accretive acquisitions that grow distributable income, the dilution can be offset by future DPU growth. The key question: does the REIT deploy retained cash productively?
When Should You Elect Scrip vs Cash?
Consider electing scrip if: you are in an accumulation phase; you want to compound units without paying brokerage; you believe the REIT’s unit price will appreciate; and the scrip discount is meaningful (3%+). Consider cash if: you need the income; you are concerned about dilution; or you want flexibility to buy a different REIT at a deeper discount.
See our Dividend Reinvestment (DRIP) Calculator to model the compounding effect of scrip elections over time. Also see our Scrip Dividend Singapore glossary entry for more detail.
- FAQ
What Is a Scrip Dividend in Singapore?
A scrip dividend (also called a stock dividend or Dividend Reinvestment Plan, DRP) gives shareholders the option to receive new shares or REIT units as their dividend, instead of cash. For Singapore S-REITs, scrip dividends are particularly common during periods when the REIT needs to conserve cash for debt repayment, capital expenditure, or growth acquisitions.
When a company announces a scrip dividend, shareholders receive a circular with the election: take the distribution in cash (the default if you do nothing), or elect to receive new units at a specified price — typically a slight discount to the current market price, making scrip slightly more attractive than cash on a per-unit basis.
How Are Scrip Dividend Prices Set?
The scrip issue price is typically calculated as a 2–5% discount to the volume-weighted average price (VWAP) of the REIT’s units over a defined pricing period (e.g., 5 trading days post-announcement). This discount incentivises shareholders to elect scrip over cash. For example, if the scrip price is SGD 1.90 and the market price is SGD 2.00, you receive units worth more than the equivalent cash dividend — but new units being issued dilutes the existing unit base.
Key Differences: Scrip vs Cash Dividend
| Feature | Scrip Dividend | Cash Dividend |
|---|---|---|
| Receipt | New shares/units | Cash |
| Price | 2–5% discount to market | Full cash DPU at declared rate |
| Dilution | Yes — new units issued | No dilution |
| Brokerage fees | None (direct issuance) | None |
| Flexibility | Low — you hold units, not cash | High — reinvest or spend freely |
| REIT Cash Flow | REIT conserves cash | REIT pays out cash |
| Tax (SG individuals) | Not taxable | Not taxable |
Is Scrip Dilutive? Understanding the DPU Impact
Yes — scrip dividends are dilutive. When new units are issued, the total unit count increases. If distributable income does not grow proportionally, DPU per unit declines. However, if the REIT uses retained cash to fund accretive acquisitions that grow distributable income, the dilution can be offset by future DPU growth. The key question: does the REIT deploy retained cash productively?
When Should You Elect Scrip vs Cash?
Consider electing scrip if: you are in an accumulation phase; you want to compound units without paying brokerage; you believe the REIT’s unit price will appreciate; and the scrip discount is meaningful (3%+). Consider cash if: you need the income; you are concerned about dilution; or you want flexibility to buy a different REIT at a deeper discount.
See our Dividend Reinvestment (DRIP) Calculator to model the compounding effect of scrip elections over time. Also see our Scrip Dividend Singapore glossary entry for more detail.