Life Science Reit (LABS) Halves Dividends to Ensure Long-Term Sustainability and Growth in Tough Market Conditions

Life Science Real Estate Investment Trust reduces dividends due to economic slowdown affecting progress

Life Science Reit (LABS) has announced a significant decrease in dividends for 2023, with the second payment for the year being reduced from 3p to 1p per share. The decision was made in light of economic uncertainty, occupiers delaying rental decisions, and high interest rates. Despite good progress during the year, the £284m specialist property fund felt it necessary to rebase the dividend to ensure it was covered by earnings and could grow sustainably.

In its annual results for the year ending on 31 December, LABS highlighted the challenges it faced and the need for a reduction in dividends to provide additional financial flexibility. This move would allow LABS to continue delivering on its strategy, even in the face of difficult market conditions. By halving dividends, the company aims to ensure that it can sustainably grow from this new level and position itself for future success.

The specialist property fund had been paying out dividends at a rate of 9p per share annually since its IPO in 2016. However, with economic uncertainty looming and high interest rates making borrowing more expensive, LABS decided that a reduction in dividends was necessary. The fund’s management team believes that this will give them more financial flexibility to make strategic investments and navigate any potential downturns in the market.

“We are disappointed to have had to reduce our dividend payments,” said LABS CEO Dr Fiona Nye. “However, we believe that this is a prudent decision that will enable us to maintain our growth trajectory and deliver long-term value for our shareholders.”

Despite facing some challenges during the year, LABS has continued to make progress towards its strategy of investing in life science research facilities across Europe. The fund has acquired several properties throughout the year and is currently working on several new developments projects. Despite these achievements, LABS management team believes that reducing dividends is necessary at this time to ensure long-term sustainability and growth.

In conclusion, Life Science Reit (LABS) has announced a significant decrease in dividends for 2023 due to economic uncertainty and other factors such as occupiers delaying rental decisions and high interest rates. The decision was made to provide additional financial flexibility so that LABS can continue delivering on its strategy even during difficult market conditions. With reduced dividends payments, LABS aims to position itself for future success while maintaining sustainable growth from its new level.

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