I believe the DRP discount encourages shareholders to reinvest...

I believe the DRP discount encourages shareholders to reinvest their dividends with the company so that the company has more capital to work with.

I would also be irked if they were issuing shares at a discount to new shareholders, but it is only to existing shareholders in proportion to their shareholdings. All shareholders can take part (with possible exception of some super funds), and almost all do. If you want cashflow from UOS, you can take the DRP shares with discount, and then sell on market.

The previous capital return was made after listing the development arm on Bursa Malaysia and receiving cash due to the transaction.

In effect, the almost full participation in the DRP means that the DRP participants are very marginally proportionally increasing their shareholding. The slow buyback has the same effect. At the same time, UOS participates fully in the UOADB DRP to slowly increase it's holding in the development arm UOADB. With the exception of the actual spin-off of UOADB which effectively sold a third of the development arm to the Malaysian public, it's all consistent and aimed toward retention and redeployment of capital into larger scale development.

As I see it, the managers as large shareholders are aligned with the long term share price rather than immediate income, and their ongoing participation in the DRP is a vote of confidence that they believe the shares are worth more than the share price.