It seems Advanced Distribution Amount does change even though an amount was given before hand.
Frasers Logistics and Industrial Trust announced a Private Placement and non-renounceable preference offering in April 2018, to fund the purchase of 21 properties in Germany and Netherlands from its parent Frasers Property Limited.
As there are new units issued, usually a REIT or stock would declare an advance dividend distribution for existing shareholders, which the shareholders who joined later through the preference offering and placement, cannot enjoy.
In the launch of equity fund raising article, it highlighted that an ordinary dividend of $0.0361 was announced. This has since been distributed.
The advance distribution is $0.0069, which is for the period of 1st Apr to 21st May, which is the period before the conclusion of the actual equity raising to ensure fairness.
1st Apr to 21st May is about 50 days, which is 40 days away from a full quarter (90 days).
If we assume the next quarter, FLT earns the same quarterly income available for distribution of $0.0181 as last quarter, a 50 day advanced distribution should be $0.0181/90 * 50 = $0.01.
An advanced distribution of $0.0069 does look very low, and I was disturbed by this.
So I asked the Investor Relations why this is the case.
The Investor Relations personnel explained to me that the advance distribution given is not firmed up.
When it is closer to the distribution date, another declaration should be announced.
According to this, even if its after the ex-dividend date, this figure could still change.
True enough, this week, an update on the advanced distribution was reported:
It seems the IR is right. The final advanced distribution is closer to $0.0101.
So it does change and since its XD we will receive this distribution on August 7.
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Thursday 26th of July 2018
ESR-REIT decided to take the other path.
The preferential offering completed on March 28th gave the new shares rights to the distribution for the entire first quarter, even though the new shares were only in existence for three days right at the very end of the quarter. There was no advanced distribution.
This resulted in a large 16% reduction of the distribution. As stated in the financial report the distribution would have been 1.008 but was reduced to 0.847 due to the preferential offering.
According to SGX there is no legal requirement for an advanced distribution to be made.
Not all REITS are bothered too much about their Unitholders.
ESR-REIT appears to be in that group.