LONDON (ShareCast) - (Sharecast News) - Hammerson has proposed an interim dividend of 0.2p a share and a scrip alternative of 2p a share to meet its obligations as a real estate investment trust (REIT).
The shopping centre operator said the higher scrip dividend, paid in shares, would probably be the best option for most investors because of the difference in value. It said the scrip payout would help it retain cash during the Covid-19 crisis.

Hammerson will hold a shareholder meeting on 4 December to approve the scrip dividend. The company's directors intend to take the scrip payout, it said.

As a REIT, Hammerson is obliged to pay 90% of its tax-exempt income to shareholders each year. If it fails to do so it will have to pay UK corporation tax on UK property income and capital gains.

The enhanced scrip dividend alternative assists the company in meeting its ... distribution obligations whilst retaining cash for future operating and capital expenses," Hammerson said. "In light of the ongoing Covid-19 pandemic and its effects on the retail sector, the board considers that the enhanced scrip dividend alternative is the most prudent way for the company to seek to meet its ... obligations."

The owner of London's Brent Cross and the Birmingham Bullring shopping venues came close to collapse during the Covid-19 crisis. Shareholders approved an £852m rescue plan in September that included a £552m rights issue.

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