Guide · Real-estate funds

P/BV of a Brazilian REIT (FII): what it is and how to read the discount

It's the most-quoted multiple for saying a real-estate fund is "trading at a discount". It's also the most misread — because buying below net asset value is only a bargain if that net asset value is real.

What P/BV means for a FII

P/BV = share (cota) price ÷ net asset value per share (NAV/share)

NAV per share isn't an opinion: it comes from the monthly report the fund files with the CVM (the informe mensal). At Dados B3, the price used in this ratio is that of the first trading session after the report was actually published — never a price from today paired with an old book value. It's the same point-in-time discipline we apply to stocks: no look-ahead, so the number doesn't know the future.

Why it differs from a stock's P/B

In an ordinary company, book equity is largely historical cost — what was paid for the assets years ago. In a FII, the "book" is almost entirely the appraised value of its real estate (or, in a paper fund, its CRI portfolio marked to market), re-stated periodically. In other words, NAV per share already tries to reflect the current value of the assets. That's why a P/BV below 1 means, quite literally, that the market prices the fund below the declared value of its own assets.

Below 1.0 looks like a discount — it isn't always. The appraisal may be stale or optimistic. A distressed fund can show a P/BV of 0.2 precisely because the manager keeps the book value high on paper while the market already prices the collapse. Real example: an office fund with 100% vacancy trading at P/BV 0.2 — the market isn't "wrong", it's reading a property that generates no rent (this was the case with CNES11/CENESP). P/BV is the start of the question, not the answer.

Above 1.0 can be fair

The mirror holds too: a fund with a high-quality, well-located portfolio and a queue of tenants can trade at P/BV 1.1 or 1.2 without being "expensive". The market pays a premium for assets it trusts are worth more than the last appraisal recorded. As with stocks, the multiple has to be read together with the quality of the assets and the risk — not on its own.

The invariant we check

The math has a guardrail. Total net assets divided by the number of shares must equal the NAV per share the fund reports. When it doesn't, the number is flagged, not hidden — we'd rather show the inconsistency than publish a P/BV that looks clean but rests on figures that don't reconcile with each other.

Brick and paper: same formula, different meaning

Where the book comes from changes everything. In a brick (tijolo) fund, NAV is property appraisals — so vacancy and default weigh on that value. In a paper (CRI) fund, NAV is a portfolio of receivables marked to an interest-rate curve, and tends to hug 1.0 unless there's credit stress. The formula is identical; the reading isn't. We break this down in Brick vs paper.

See the FIIs

Honest limitations

NAV per share is only as good as the appraisal behind it — which is periodic and can lag.
P/BV says nothing about the future price or the income the fund distributes.
Not investment advice. A "discount" by the math can be embedded risk in reality.