Q&ACategory: REITsPrice to Book Ratio for Parkwaylife Reit
Joey Luu asked 2 months ago
Hi Rusmin, I am analyzing Parkwaylife Reit and got the attached Price to Book Ratio chart. Understand that we should enter when Price to Book ratio is <1, but the Price to Book for this Reit is more than 1.17 ever since year 2010. Is Price to Book of 1 still a valid benchmark for this Reit? Or should I be looking at the 10 years average of 1.60 as a benchmark?
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1 Answers
Rusmin Ang Staff answered 2 months ago
Hi Joey, No, we can't simply use Price to Book less than 1 as an entry price or more than 1 as exit price. We have to based on each individual REIT's historical valuation as a benchmark. In the case of PLife, you can see that it is impossible to buy it below 1. So it would be better to use its average as a quick indicator. P.S. I've explained about this during the live webinar. If you haven't attended, strongly encourage you to attend but our next live webinar will be conducted only in the second half of the year.