Distribution yield

The distribution a property trust pays as a percentage of its market value.

A trust distributing ₹445 crore against a ₹6,800 crore market value yields 6.54%.

Indian trusts are required to distribute the large majority of their distributable cash flow, which makes the yield the primary valuation measure and links it directly to funds from operations.

The comparison that matters is against the government bond yield. The spread compensates for the risk that rents fall and for the illiquidity of the underlying property.

Growth in the distribution comes from rent escalations and from acquisitions. Only the first is free.