A dilutive acquisition is used to describe a takeover that ends with the acquiring company or REIT ending up with lower earnings per share (EPS) than before the takeover.

In the context of REITs investments, a dilutive acquisition happens when a REIT acquires a property that reduces its distribution per unit (DPU).

Dilutive acquisitions are usually the result of ill-timed or miscalculated expansion attempts, although there are instances when these could be undertaken for strategic reasons.

The opposite of a dilutive acquisition is the accretive acquisition.

This entry is part of REITsWeek's glossary of REITs and real estate investment terms.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.

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