Relative Valuation is a method to compare a companies value to other companies by using multiples. One of the popular relative valuation multiples is price to earning ratio (P/E ratio). However, P/E ratio is not applicable to REITs as its assets are heavily in investment properties and revaluation would skew the earning.

For REITs, commonly investor would apply the concept of reversion to mean to relative valuation multiples like P/NAV, yield or yield spread (introduced by ProButtefly). There are a few sites that you could refer for detail:
1) Invest For Yourself – CapitaLand Retail China, my latest target!
2) My Stock Investing – Singapore REIT Price / NAV Range Chart Feb-2019
3) Probutterfly – What Is A Fair Price to Pay for Ascendas REIT amidst Rising Interest Rates?
4) REIT Screener (Subscription Required)

Black Line is the Mean For this post, we would explore step by step how could we apply reversion to mean to P/NAV, dividend yield and