Here, we introduce the Implied Cap Rate calculated by Sumitomo Mitsui Trust Research Institute.
These indices may be used as benchmarks for investment in J-REITs.

Implied Cap Rate

[ updated November 15, 2024 ]

  • The Implied Cap Rate is the yield given by dividing the NOI (Net Operating Income) from managed properties by the Implied Value of a J-REIT. The Implied Value is the total of the market cap and debts of the J-REIT, and represents its acquisition value in the capital market.
  • In another word, the Implied Cap Rate represents the yield of NOI produced at a certain share price. It is used as a benchmark for the investment decision, and also as a hurdle rate for the J-REIT manager to compose their property portfolio.

Our indices show;

    1. The fluctuation of the Implied Cap Rate for the J-REITs listed on the Tokyo Stock Market since March 2005.

      ※The Implied Cap Rate of " J-REIT(Major Issues)" altered to " J-REIT(All Issues)" from April 2014, due to the change in Implied Cap Rate constituents. For comparison, difference between Implied Cap Rate of " J-REIT(Major Issues)" and " J-REIT(All Issues)" on March 2014 is 0.04 pt.

  1. The spread between the weighted average NOI yield and the Implied Cap Rate.
  2. SMTRI J-REIT Implied Cap Rate is calculated monthly. Basically the graphs are released at the middle of each month after a two month delay.

Graph1Graph2

Notes on usage

  • Implied Cap Rate and NAV of J-REITs presented on this website is the intellectual property of Sumitomo Mitsui Trust Research Institute, and all rights related to this information belong to Sumitomo Mitsui Trust Research Institute.
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