Life Science Reit (LABS) announced in its annual results for the year ending December 31 that it will be cutting its dividends for 2023. The dividends will be halved from 4p to 2p per share, with the second payment decreased from 5p to 2p per share. Despite reporting good progress during the past year, the £284m specialist property fund cited economic uncertainty, occupiers delaying rental decisions, and high interest rates as factors contributing to this difficult decision.
The goal of this change is to ensure that LABS’s dividend is covered by earnings and can grow sustainably from this new level. By reducing its dividends, LABS is providing additional financial flexibility to deliver on its strategy in a challenging market environment. The fund believes that this adjustment will position it better to navigate current economic conditions and continue progress towards its long-term objectives.
While some may view this move as disappointing, LABS remains optimistic about its future prospects. The fund remains focused on creating value for shareholders and delivering sustainable returns over the long term. With a clear strategy in place and a commitment to financial prudence, LABS remains confident that it can weather any challenges that come its way and emerge stronger than ever before.
