What are the performance indicators of REITs?
Investors should familiarise themselves with the following performance indicators of REITs: (i) Management Expense Ratio (“MER”) The ratio of expenses incurred in operating a REIT to the NAV of the REIT. These expenses include the annual management fee, the annual trustee fee, valuation and auditors’ fees and miscellaneous costs of administration, but exclude direct property operating expenses. The MER is published in the annual and interim reports. (ii) Dividend Per Unit (“DPU”) Yield The ratio of the distribution paid to unitholders, known as the Dividend Per Unit (DPU) from the REIT’s income to the price paid for the units of the REIT. (iii) Net Asset Value (“NAV”) NAV represents the total assets of a company after subtracting all its liabilities. (iv) Average Annual Return This is the percentage change in a REIT’s price for the period under review. This indicator allows investors to compare the annualised return of the REIT with other forms of investment as typically expressed in ‘
