Sometimes also referred to as “yield-accretive acquisition”, an accretive acquisition is the purchase of an asset that leads to an increase in the acquiring S-REIT’s distribution per unit.

The opposite of an accretive acquisition is a dilutive acquisition.

"Ancillary tenants" refers to lessees who rent smaller portions of a property, without occupying a significant share. These tenants typically consist of smaller businesses and lease smaller lots, often with shorter-term agreements.

Compared to anchor tenants, ancillary tenants typically have less bargaining power, which may result in less favorable lease terms.

Due to factors such as lease duration and business dynamics, ancillary tenants generally experience higher turnover rates compared to anchor tenants.

As a result, properties with a higher proportion of ancillary tenants tend to have a shorter weighted average lease expiry (WALE) period.

Annualized Distribution Yield, also known as DPU Yield, is a real estate investment metric that measures the total annual distribution amount paid out to unit holders in a Real Estate Investment Trust (REIT) as a percentage of the REIT's share price.

The distribution amount, also known as the Distribution Per Unit (DPU), is calculated by dividing the total distribution amount paid out by the total number of units outstanding. The DPU Yield formula then calculates the annualized distribution amount as a percentage of the REIT's share price.

For example, if a REIT pays out a total distribution of $10 million in a year and has 100 million units outstanding, the DPU would be $0.10 ($10 million/100 million units). If the REIT's share price is $2, the DPU Yield would be 5% (($0.10 x 4 quarters)/$2).

DPU Yield is commonly used by investors to compare the income returns of different REITs and to evaluate the potential income yield of a REIT investment. It is important to note that the DPU and DPU Yield can fluctuate based on various factors such as changes in rental income, expenses, and interest rates, among others.

CAPEX stands for Capital Expenditures and it refers to expenses related to acquiring, maintaining, or upgrading assets like properties, plants, and equipment. This includes initiatives to enhance assets such as refurbishing buildings, maintaining lifts and escalators, and acquiring new properties.

The capitalization rate, calculated by dividing a property's net property income by the property value, serves as a measure to assess how effectively a REIT generates income from operating a specific property.

A higher capitalization rate suggests greater returns on investment, but it also indicates a higher perceived level of risk associated with the property.

For example, a commercial building produces an NPI of $15 million per year and its capital value is $250 million. In this case, the cap rate of the building is 15/250 = 6%

When the capitalisation rate for a property is reduced, its capital value increases. This effect is called "cap rate compression".

For example, a commercial building that produces NPI of $30 million a year is valued at $350 million, giving a cap rate of 8.57%. If the NPI remains the same over the next 3 years but there is an increased optimism on the commercial building resulting in a valuation of $500 million. This means that the cap rate of the commercial building has compressed from 8.57% to 6%.

Convertible Perpetual Preferred Units (CPPUs) are specialized units issued by a REIT that lack a maturity or specific buyback date. These units provide unitholders with the option to convert them into a predetermined number of common units of the REIT.

While CPPUs grant unitholders voting rights, they do not confer any claim on the REIT's assets in the event of its dissolution. Additionally, CPPUs are traded separately from the common units of the REIT, although their prices closely align with the performance of the common stock.

The term "cost of capital" refers to the expenses that a company has to bear when obtaining funding through equity (stocks) or debt (loans or bonds). When a company raises funds through equity, the cost of equity capital is determined by the dividend rate paid to shareholders and the expected growth rate of the company's stock price. 

For example, if a company pays a dividend of $2 per share and the expected growth rate of its stock price is 5%, the cost of equity capital would be 7% (2% dividend rate + 5% growth rate). 

On the other hand, when a company borrows money through debt, the cost of debt capital is the interest expense paid on the debt. For instance, if a company borrows $100,000 at an interest rate of 8%, the cost of debt capital would be 8% per annum.

A Debt Expiry Profile is a table or chart that outlines the scheduled repayment of a Real Estate Investment Trust's (REIT) debts over the years. It shows the total amount of debt and the year in which it is due to be repaid. 

This information is important for the REIT to manage its debt obligations and plan for future financing needs. For example, if a REIT has a significant amount of debt maturing in a given year, it may need to refinance or raise additional capital to meet those obligations.

A well-staggered debt expiry profile allows for more time for a REIT to plan for refinancing its debts or to raise sufficient funds to gradually pay-off those debts.

A dilutive acquisition is when a REIT purchases a property that results in a decrease in its distribution per unit. On the other hand, an accretive acquisition is an acquisition that increases the REIT's distribution per unit.

Distribution per Unit (DPU) is a metric commonly used in the context of Real Estate Investment Trusts (REITs) to indicate the amount of income that an investor can expect to receive for each unit of investment they hold in a particular REIT.

DPU is calculated by taking the total amount of income distributed by the REIT, such as rental income or dividends, and dividing it by the total number of units outstanding. The resulting figure represents the amount of income that an investor can expect to receive for each unit of investment they hold.

For example, if a REIT distributes $10 million in rental income to its investors, and has 10 million units outstanding, the DPU would be $1 per unit ($10 million divided by 10 million units).

DPU is an important metric for REIT investors, as it helps to provide a clear picture of the potential income return that can be generated from a particular investment. It is also used to compare the performance of different REITs, as well as to track the performance of a single REIT over time.

The ratio of dividends paid to net income. The higher the ratio, the more the REIT is paying out in dividends but it also means that the sustainability of dividends is risker as a drop in net income will lead to lower dividends. 

The Gearing Ratio is a financial metric that measures a company's debt in relation to its equity. It is commonly used to evaluate a company's financial leverage or its ability to meet its financial obligations.

The Gearing Ratio is calculated by dividing the company's total debt by its total equity. The result is expressed as a percentage. A high Gearing Ratio suggests that a company is highly leveraged and has a significant amount of debt relative to its equity. This can be risky because the company may struggle to meet its debt obligations if it experiences financial difficulties.

On the other hand, a low Gearing Ratio suggests that a company has a smaller amount of debt relative to its equity and may be less risky in terms of debt management. However, a low Gearing Ratio may also indicate that the company is not taking advantage of potential growth opportunities that could be funded through debt.

In summary, the Gearing Ratio is a financial metric used to assess a company's level of debt in relation to its equity, providing investors with insight into the company's overall financial health and ability to manage its debt obligations.

Gross rental income is the total amount of rental income generated by a property, before any deductions for expenses such as property taxes, maintenance costs, and management fees. 

It includes both fixed rent, which is a predetermined amount of rent paid by tenants on a regular basis, and turnover rent, which is calculated based on the tenant's revenue or sales. 

For example, a shopping mall may charge tenants a percentage of their sales as turnover rent in addition to a fixed monthly rent.

Interest Coverage Ratio (ICR) is a financial metric that measures a company's ability to pay its interest expenses on outstanding debt. It shows how many times a company can cover the interest payments on its debt with its earnings before interest and taxes (EBIT).

The formula for calculating the Interest Coverage Ratio is:

ICR = EBIT / Interest Expense

A higher Interest Coverage Ratio means that a company is better able to meet its interest payments on its outstanding debt. For example, an ICR of 4 indicates that a company is earning four times the amount of its interest expenses, which is generally considered healthy.

On the other hand, a low ICR indicates that a company may have difficulty making its interest payments, and it may be at risk of defaulting on its debt. Lenders and investors often use the ICR to evaluate the creditworthiness and financial health of a company. Generally, a higher ICR is preferable, as it indicates that the company has a strong financial position and is less likely to default on its debt obligations.

Lease expiry profile refers to the distribution of lease expiries across the REIT's portfolio in a given year, expressed as a percentage of the total leases. 

It helps investors understand the risk associated with potential tenant turnover and the impact on the REIT's cash flow. The profile can be based on gross rental income or net lettable area, depending on the metric used by the REIT.

A well staggered lease expiry profile will minimise the amount of leases that are slated to expire in any given year, thereby reducing vacancy risks.

This a very important concept in investing, especially for REITs as it owns multiple properties. It is the value of a REIT's asset minus its liabilities. This is also known as book value. 

For example, a REIT has $200 million in properties, $15 million in cash and $25 million in bank loans, the NAV of the REIT is equal to (200 + 15) - 25 = $190 million

Net Lettable Area (NLA) is a real estate metric that represents the total floor space within a property that is available for rent and generates income. 

It excludes any non-leasable areas such as common areas, lobbies, and hallways. NLA is an important metric for real estate investors and property managers as it helps to calculate the potential rental income and occupancy rates of a property.

This is the gross revenue of a property minus property-related expenses such as maintenance and utilities. This is a key measure of the earnings power of a property.

Net Property Income Yield (NPI Yield) is a metric used to measure the income generated by a property relative to its market value or acquisition cost. It's calculated by dividing the net property income (NPI) of the property, which is the total revenue minus all operating expenses, by its market value or acquisition cost.

For instance, if a property has a net property income of $100,000 and a market value of $1 million, the NPI Yield would be 10% ($100,000/$1,000,000).

Real estate investors often use NPI Yield to compare different properties' performance or to evaluate a property's potential income return. NPI Yield is also useful in assessing a property's financial health by determining its ability to generate income relative to its market value or acquisition cost.

Perpetual securities are a type of hybrid security that doesn't have a maturity date. They are a combination of bonds and shares, but they are not the same as traditional bonds. 

Perpetual securities typically offer fixed distributions, but the issuer has the discretion to stop paying them without defaulting. These securities can exist indefinitely, unless the issuer decides to redeem them.

Price-to-Book Ratio (P/B ratio) is a financial metric used to evaluate a company's market value relative to its book value. The book value of a company is the total value of its assets, minus any liabilities and intangible assets such as patents, trademarks, and goodwill.

The P/B ratio is calculated by dividing the market price per share of a company by its book value per share. The ratio indicates how much investors are willing to pay for each dollar of a company's book value.

For example, if a company has a book value of $10 per share and its stock is trading at $20 per share, its P/B ratio would be 2 ($20/$10). This means that investors are willing to pay twice the book value of the company for its stock.

A high P/B ratio suggests that investors have high expectations for the company's future growth and earnings potential, while a low P/B ratio may indicate that the company is undervalued or facing financial difficulties. However, it is important to compare P/B ratios of companies within the same industry, as different industries may have different average P/B ratios.

Price to NAV (Net Asset Value) is a financial metric used to assess the valuation of a Real Estate Investment Trust in relation to its net asset value per share or unit. It is calculated by dividing the market price of a REIT's shares or units by its net asset value per share or unit.

The formula for REIT Price to NAV is as follows: Price to NAV = Market Price per Share or Unit / Net Asset Value per Share or Unit

If the resulting ratio is greater than 1, it suggests that the REIT is trading at a premium to its net asset value. Conversely, if the ratio is less than 1, it indicates that the REIT is trading at a discount to its net asset value.

Price to NAV is often used by investors as a valuation indicator to assess whether a REIT is overvalued or undervalued in the market. However, it's important to consider other factors such as the quality of the REIT's properties, its financial performance, the overall market conditions, and the specific dynamics of the real estate sector before making investment decisions based solely on Price to NAV.

A rights issue is a way for REITs to raise capital through issuing of new shares. The shares are offered to existing shareholders, usually at a discount to the prevailing market trading price.

The higher the discount, the greater the dilution for shareholders that do not subscribe to the rights issue.

The risk-free rate refers to the theoretical rate of return of an investment that carries zero risk, typically measured by the yield of government-issued bonds. 

It serves as a benchmark against which the expected return of other investments, such as REIT dividend yield, can be compared to assess their relative risk and attractiveness to investors.

A triple net lease is a type of lease agreement in which the tenant is responsible for paying real estate taxes, property insurance, and building maintenance costs, in addition to the monthly rent and utilities. 

This type of lease places the majority of the operating costs on the tenant rather than the REIT.

Weighted Average Lease Expiry (WALE) is a metric used in real estate to assess the risk associated with a property's tenancy. 

It is calculated by taking the weighted average of the remaining lease term of all tenants, using either their occupied area or income against the total combined area or income of the other tenants. 

This helps to give an indication of the expected cash flow for a property and its potential risk.

REITs with longer WALEs face a lower risk of vacancy. However, it is possible that such REITs may not be able to negotiate for higher rents when market rents increase.