MREIT Q4 distributable income up 37% after injection

MREIT [MREIT 13.48 unch] [link], the REIT subsidiary of Megaworld [MEG 1.74 ?1.1%], teased its FY24 performance and a 37% increase in its distributable income on a 34% increase in revenues. MREIT attributed the increase to its “strategic expansion”, notably the injection of ?13 billion worth of office towers by way of the property-for-share swap that was approved and executed in October. MREIT said that it is “on track to achieve 1M sqm GLA within the next 5 years”. 

  MB BOTTOM-LINE:  The injection represented a massive uptick in MREIT’s gross leasable area, but like we saw with AREIT’s FY24 teaser, what matters is whether the income and profits increase on a per-share basis. For shareholders, it doesn’t really impact you at all for expansion to increase the revenues and profits of a REIT if the new shares issued to pay for that expansion don’t allow the dividend to increase. That’s not completely true, since neutral or non-accretive injections could help diversify a REIT’s portfolio or set a REIT up for future growth, but I don’t think that’s necessarily the case here considering the injected towers are part of the commercial sector that has been holding most other REITs back due to underperformance. REIT growth is good. Don’t get me wrong. What matters, though, is how that growth impacts the per-share dividend. Let’s see if the Q4 dividend grows.

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