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← REITs vs Direct Property Ownership
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Question
Why might a listed REIT's share price diverge significantly from the underlying value of its property portfolio?
1
Because REIT valuations are updated monthly while property prices change daily, creating a systematic lag
2
Because REIT shares trade on stock exchanges subject to short-term market sentiment, investor flows, and risk appetite — meaning they can be repriced rapidly by equity market movements independently of changes in the underlying property values
3
Because REIT managers deliberately maintain a share price discount to NAV to discourage short-term speculation
4
Because REITs are legally required to maintain a share price discount to NAV as investor protection
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