Both GAV and NAV communicate the investment value of a property. These measures are commonly used in relation to REITs and property funds. The measures are broadly used to calculate on-going management fees, performance fees and by investors when considering entering an investment on the secondary market.
GAV stands for Gross Asset Value, and is used to describe the current value of all assets held within a property fund. It includes debt and equity positions but excludes acquisition and establishment costs. GAV can also be understood as the market value of all assets within a fund.
NAV stands for Net Asset Value, and is used to describe the current value of all assets held within a property fund less any debt associated with the fund. NAV typically works on a per-share basis, meaning it shows the market value of an individual share within a fund. Investors looking to enter an investment on the secondary market will compare the NAV with the current asking price to ensure it is inline with the underlying market value.
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