ARENA REIT’s Fully Unfranked Dividend Raises Tax Efficiency Questions

Dividend Details Confirmed for Q4 2024

ARENA REIT (ASX: ARF) has provided an update to its previously announced dividend distribution, confirming an ordinary dividend of 4.5625 cents per security for the quarter ending 31 December 2024. The dividend is scheduled for payment on 6 February 2025, with the record date set at 31 December 2024 and an ex-dividend date of 30 December 2024.

This dividend remains fully unfranked, reflecting the trust’s current tax position, and will be paid in Australian dollars. No external approvals were required for this distribution, indicating a straightforward continuation of the REIT’s income return to investors.

Dividend Reinvestment Plan Offers Attractive Discount

ARENA REIT’s Dividend Reinvestment Plan (DRP) remains fully operational for this distribution. Security holders who opt to reinvest their dividends will benefit from a 1.5% discount applied to the DRP price. The reinvestment price has been calculated as AUD 3.8562 per security, based on the volume weighted average price (VWAP) over a 10-day trading period from 3 to 16 January 2025.

New securities issued under the DRP will rank pari passu with existing securities from the issue date, ensuring equal rights and entitlements. Importantly, there are no minimum or maximum participation limits, making the DRP accessible to all investors regardless of their holding size.

Implications for Investors and Market Position

This update signals ARENA REIT’s steady approach to delivering consistent income returns amid a dynamic real estate market. The modest DRP discount may encourage reinvestment, supporting the REIT’s capital base without diluting shareholder value excessively. However, the fully unfranked nature of the dividend may influence the after-tax returns for certain investors.

While the announcement does not indicate any changes to the REIT’s underlying financial performance or outlook, it provides clarity on income distribution mechanics and investor options ahead of the payment date. Market participants will be watching closely to see how investors respond to the DRP offer and whether reinvestment uptake impacts trading volumes or security price stability.