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How to calculate returns for REITs?


I'm doing a final year proj on REITs in ASEAN countries, just thought of doing a general check on what are the measures currently used in the markets to calculate and evaluate returns of Real Estate Investment Trust (REITs)?
Is it the yield?

REITS have to pay out 90% or more of FFO (Funds From Operation), otherwise they are taxed at the corporate level on income. So that FFO is what drives the dividends. And yes dividends are a large part of the returns for REITS.

The other part of the return is based on "stock" price. If the REIT buys good properties over time they should appreciate and FFO should increase as rentals increase. This increasing asset base and higher rentals hopefully will cause the stock price to increase giving you another source of returns.

Hope this helps

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