Q: Looking at Dream Industrial REIT, I see that the P/E ratio is about 36, which I interpret as expensive, while the P/B ratio is about 0.8, which I would consider a bargain. Which is it? What am I missing?
5i Research Answer:
With REITs, because of various accounting charges and mark-to-market rules, we prefer to use cash flow as a metric rather than earnings. DIR is only 7x cash flow. This, and P/B, are certainly on the cheap side of valuation within the sector.