Funds from operations

The cash earnings measure for a property trust: net income with depreciation added back, since buildings generally do not lose value the way accounting assumes.

A trust with ₹475 crore of net operating income, ₹210 crore of interest and ₹180 crore of depreciation has net income of ₹85 crore and funds from operations of ₹265 crore: the depreciation comes back, the interest doesn't. Starting from net operating income gives the same ₹265 crore before trust-level costs, because that figure never had depreciation taken off.

Adjusted funds from operations subtracts recurring capital spending needed to keep the buildings lettable, which is closer to the cash that can be distributed.

Because Indian trusts must distribute most of their distributable cash flow, this measure and the distribution move together, which makes it the sector's equivalent of earnings. Growth in it comes from contracted rent escalations, from filling vacant space, and from acquisitions, and only the first two require no new capital.

Use the adjusted figure for yield. Unadjusted, it flatters.