Net Asset Value Report

For most countries in Europe and Asia, NAV data is typically reported by property companies, primarily due to the widespread adoption of fair-value accounting and International Financial Reporting Standards. There are different levels of independent appraiser involvement in producing these estimates, depending on the precise regulatory regimes. In theory, fair-value reporting provides additional transparency to markets as investors can look at the externally appraised value of the real estate assets held by a company on a per-share basis and compare that with the current share price to get a sense of whether shares are over- or under-priced.



Data on U.S. REITs are derived from Net Asset Value (NAV) estimates made by sell-side equity research analysts typically working for investment banks. SNL collects these estimates and calculates a median for each of the companies. U.S. and Canadian GAAP require that companies report the value of their properties at historic cost, so the companies themselves are not required to provide an estimate of NAV to the market. In calculating a company's premium or discount to NAV, two figures are examined: the company's share price and its NAV estimate. Historical data suggests that U.S. REITs tend to trade in a range of a 20% premium to a 20% discount to the NAV estimate.