Why do some REITs trade at such a big discount to NAV? - Seedly
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Anonymous

Asked on 05 Sep 2019

Why do some REITs trade at such a big discount to NAV?

For example, Ascott REIT is trading at a 0.75 PB at the moment. What is the logic behind that?

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Gabriel Tham
Gabriel Tham, Tag Team Member at Kenichi Tag Team
Level 9. God of Wisdom
Updated on 05 Sep 2019

REITs can trade below PB for a number of reasons such as cyclical industry, poor management, bad future outlook, economic conditions etc.

Ascott is part of the hospitality industry. Perhaps, the tourism industry is experiencing a downturn. Generally, the hospitality industry is a cyclical industry because there are periods of high tourism and low tourism numbers.

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šŸ‘ 1
Question Poster

05 Sep 2019

Thank You! šŸ‘