REITs are mostly yield-driven, and P/B doesn't have much meaning unless there is an intention to buy over all the properties and sell them off.
The valuations are conducted using the CAP rate, and the major component of CAP is the Net Operating Income (NOI), which is a before-tax figure.
https://www.investopedia.com/terms/...,expenditures, depreciation, and amortization.
https://officefinder.com.sg/singapore-office-cap-rates-remain-stable/
If a property generates 50mil NOI and the valuer uses a 5% cap rate, the value becomes 1bil. In an extreme example, If investors need to pay 10mil fees to their manager and pocket only 40mil, the valuer isn't going to consider that during the valuation because they are valuing the property itself rather than their investment choice/structure, so if investors require the same 5% return as the cap rate, the share price need to drop to achieve the required return. Even if the property gives a return in excess of the Cap rate after fees, the market might still demand a return higher than the Cap rate, which means the price has to fall also. So, in conclusion, the fees side already provides a good cushion when it comes to valuation. If an investor can buy the property themselves without using a manager, they can probably save that 10mil fee, but then, it can also be argued that there is a tax-saving benefit using a REIT structure vs a direct investment, but the tax component does not enter valuation. However, if investors make a direct investment, they will use 70% to 90% leverage compared to the below 40% under a trust. The ROE for them will be much higher despite the tax advantage in a Trust model, and their interest expenses can be tax-deductible. Also, they control the timing as to when to sell the property. Therefore. investors who cannot control when to sell the properties will likely go after the yield and perceived stability rather than P/B.
This report includes a table on Cap rates across major Asian markets. The Cap rate tracks interest rates but does not exactly mirror the interest rate environment. Otherwise, HK would be illogical to have a 3%++ Cap rate vs. the USD short-term rate, which is more than 5%. So, the long-term rates probably have a bigger impact. In addition, various factors like the types of properties, country, supply/demand and economic condition will affect the cap rate.
https://mktgdocs.cbre.com/2299/546d2f6a-769a-4a3d-ba9d-891088f693b6-1982492843.pdf
Over the past 12 months, REITs have also sold properties (especially those located in SG). Just look at the reported selling price vs valuation and see if they are selling at a gain or loss.
For every 50bps hike in the Cap rate, the NOI need to increase by 10% to maintain the current valuation. Using that 1bil property with 50mil NOI at a 5% Cap rate as an example, if NOI increased to 55mil, it could support a Cap rate of 5.5%. So, the extent of valuation decline also depends on its ability to hike rents, which you all need to research what your asset classes are your REITs holding.
