Net Asset Value (NAV): The Number That Tells You If an S-REIT or Unit Trust Is Fairly Priced
Why NAV per unit matters more for S-REITs and funds than it does for ordinary stocks
Net Asset Value (NAV) is the total value of a fund’s or REIT’s assets minus its liabilities, usually expressed on a per-unit or per-share basis, giving investors a benchmark ‘fair value’ figure to compare against the actual market trading price when assessing whether a unit trust, ETF, or S-REIT is trading at a premium or discount.
Last updated: October 2026
Not financial advice. All figures for educational reference only. Data as at October 2026.
Key Takeaways
- NAV per unit = (Total Assets − Total Liabilities) ÷ Number of Units Outstanding.
- For unit trusts and most ETFs, NAV is calculated and published daily, typically after market close.
- For S-REITs, NAV per unit is reported periodically (semi-annually or annually) based on independent property valuations, not calculated in real time.
- The ratio of a REIT’s market price to its NAV per unit (P/NAV) is a core valuation tool for Singapore REIT investors.
- A REIT or fund trading below its NAV (a discount) isn’t automatically a bargain — it can reflect legitimate concerns about asset quality, gearing, or management.
What Is Net Asset Value (NAV)?
Net Asset Value is a foundational concept across unit trusts, ETFs and REITs, representing the ‘intrinsic’ value of the underlying portfolio or property assets after subtracting all liabilities (such as borrowings, payables and accrued expenses). Dividing this net figure by the number of outstanding units or shares produces NAV per unit, a benchmark that can then be compared against the actual market trading price.
For a unit trust or most ETFs, NAV is typically the primary determinant of the price at which units are created or redeemed, since these vehicles are designed to trade very close to their underlying NAV (with ETFs in particular relying on an arbitrage mechanism involving authorised participants to keep market price and NAV closely aligned). For S-REITs, however, the units trade on SGX at whatever price the market is willing to pay, which can diverge meaningfully from the REIT’s reported NAV per unit, creating the well-known Price-to-NAV (P/NAV) valuation framework widely used by Singapore REIT investors.
How Does Net Asset Value (NAV) Work in Singapore?
S-REITs are required to have their property portfolios independently valued periodically (commonly annually, with some REITs opting for semi-annual valuations), and these valuations feed directly into the REIT’s reported NAV per unit, disclosed in financial statements and investor presentations. Because property valuations are updated only periodically rather than continuously, a REIT’s reported NAV can lag real-time changes in property market conditions, interest rates, or asset performance.
Singapore REIT investors commonly compute the P/NAV ratio — the REIT’s current unit price divided by its most recently reported NAV per unit — as a core valuation gauge. A P/NAV below 1.0 (trading at a discount to NAV) can suggest the market is pricing in concerns about the portfolio, management, or sector outlook that aren’t yet reflected in the stale valuation, or it can reflect a genuine market overreaction creating a buying opportunity — distinguishing between the two requires deeper analysis of the specific REIT’s fundamentals.
For unit trusts distributed in Singapore (via platforms such as Endowus, FSMOne, or bank distribution channels), NAV is calculated and published daily by the fund manager, and this is the price at which new subscriptions and redemptions are typically transacted, usually with a small bid-offer spread or sales charge layered on top depending on the platform and fund.
Net Asset Value (NAV) Example
Suppose an S-REIT reports total property and other assets of S$8 billion and total liabilities (including borrowings) of S$3 billion, with 2 billion units outstanding. Its NAV per unit is calculated as (S$8 billion − S$3 billion) ÷ 2 billion units = S$2.50 per unit.
If the REIT’s units are currently trading on SGX at S$2.00, its P/NAV ratio is S$2.00 ÷ S$2.50 = 0.80, meaning the market is valuing the REIT at an 20% discount to its book-value NAV. An investor would then need to assess whether this discount reflects a genuine undervaluation (perhaps due to temporary sector-wide pessimism) or legitimate concerns (such as high gearing, weak rental reversions, or an ageing portfolio) before concluding the discount represents an attractive entry point.
Advantages of Net Asset Value (NAV)
A clear, comparable valuation anchor. NAV gives investors a ‘book value’ reference point distinct from whatever sentiment is currently driving the market price.
Useful for spotting potential mispricing. A REIT trading at a persistent, unusually deep discount to NAV relative to its historical range or peers can flag an area worth deeper investigation.
Standard across the industry. NAV and P/NAV are consistently reported and widely understood metrics, making cross-REIT and cross-fund comparison straightforward.
Directly relevant to fund transactions. For unit trusts, NAV is literally the transaction price, making it operationally essential, not just an analytical tool.
Risks and Limitations
REIT NAV can be stale. Because property valuations are only updated periodically, a REIT’s NAV may not reflect current market conditions, especially during periods of rapid interest rate or property market change.
A discount to NAV isn’t automatically a bargain. Persistent discounts often reflect genuine, ongoing concerns (weak sponsor support, high gearing, poor asset quality) rather than simple market mispricing.
Valuation methodology can vary. Different independent valuers may use different assumptions (capitalisation rates, discount rates), introducing some subjectivity into reported NAV figures.
NAV ignores growth prospects. A REIT or fund with strong NAV but weak growth potential may still underperform one with a higher P/NAV but stronger embedded growth.
NAV vs Market Price
Why these two numbers can diverge, and what that divergence can signal.
| Aspect | Net Asset Value (NAV) | Market Price |
|---|---|---|
| Basis | Underlying asset value minus liabilities | Supply and demand on the exchange |
| Update frequency (REITs) | Periodic (semi-annual/annual valuations) | Continuous, real-time trading |
| Update frequency (unit trusts) | Daily | Transacted at NAV (with fees/spread) |
| Can it diverge? | Reference point | Can trade at premium or discount to NAV |
| Best used for | Assessing relative valuation (P/NAV) | Actual entry/exit transaction price |
Source: TKN analysis, standard REIT and unit trust valuation practice.
The Bottom Line
For Singapore investors, Net Asset Value is important because it provides an independent, asset-based valuation anchor that can be compared against the market price to assess whether an S-REIT or fund looks cheap, fair, or expensive. P/NAV should always be read alongside gearing, distribution yield, and asset quality rather than used as a standalone buy signal, since a low P/NAV can reflect either genuine mispricing or legitimate underlying concerns.
Frequently Asked Questions
What does it mean when a REIT trades below its NAV?
It means the REIT’s market price per unit is lower than its most recently reported NAV per unit, producing a P/NAV ratio below 1.0; this can reflect either a genuine market undervaluation or legitimate concerns about the REIT’s assets, gearing or management that the market is pricing in.
How often is REIT NAV updated?
Most S-REITs update their NAV based on independent property valuations conducted annually, though some REITs opt for semi-annual valuations, meaning NAV figures can lag real-time property market conditions between valuation dates.
Is NAV the same as book value?
NAV and book value are closely related concepts — NAV is essentially the per-unit expression of a fund or REIT’s net asset-based book value, calculated as total assets minus total liabilities divided by units outstanding.
Why does unit trust NAV change daily but REIT NAV doesn't?
Unit trusts hold liquid, exchange-traded securities that can be marked to market daily, while S-REITs hold physical property assets that require periodic professional valuations rather than continuous real-time pricing.
Should I only buy REITs trading below NAV?
Not necessarily. A discount to NAV should be investigated alongside gearing levels, portfolio quality, sponsor strength and distribution sustainability, since some REITs trade at a persistent discount for structural reasons rather than representing a clear bargain.