RE:RE:RE:RBC Price Target Raised to $18 - May 26th (today)Sphynx;
Your question is a very good one.
The NAV of any REIT starts out with an appraisal of
each individual property. It does not matter who owns it.
The appraiser is assessing how much it would sell for.
In that sense, your point is spot-on.
In the real world I am certain that the Industrial segment
would sell for a much higher price than the current official
NAV; perhaps 20% to 40% more.
The cap rates are merely a measure of the total property
returns based on today's rent. Industrial REITs are renewing
leases in Canada at a 40% to 80% increase over the current lease.
It depends on when the original lease was done and the loation
and specs of the building (height etc)
mat