MDW1954 wrote:But... of what practical value is it? How does one interpret gearing in a REIT? Personally, I like gearing, and as SKYSHIP has observed, some REITs are ludicrously under-geared. Take UKCM, for instance.
MDW1954
I think that NAV 'True Discount' = Discount - Gearing, so that for
BREI true discount = 26.29% - 26% = 0.29%
BCPT true discount = 22.24% - 26% = -3.76% (Premium) (but gearing was 14.4% at 31/12/2021)
RGL true discount = 13.62% - 0% = 13.62% (but Loan to Value 42.4%)
UKCM true discount = 22.04% - 0% = 22.04% (but gearing was 13.5% at 31/12/2021; has it disappeared?)
If correct, this throws quite a different light on some of the simple discount figures.
I am not sure that the AIC gearing values in their tables are correct, when compared with the Factsheet documents. The gearing values seem a bit variable!
Tramrider