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 reports ₹445 crore.

The adjusted version subtracts recurring capital spending needed to keep the buildings lettable, which is closer to what can genuinely be distributed.

Indian trusts are required to distribute most of their distributable cash flow, so the distribution and this measure are closely linked.

Use the adjusted figure for yield. The unadjusted one flatters.

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.