Yield spread

Yield spread — an income asset’s yield minus the comparable risk-free rate; for PH REITs, dividend yield minus the PH 10-year government bond yield. The spread is your payment for accepting building risk instead of sovereign risk, and the anti-trap device for property: a REIT yielding 6% with strong occupancy can beat one yielding 11%, because the extra 5 points are the market pricing empty floors. Never compare REIT yields to each other in isolation — always as spread over the risk-free peso. BSP rate cycles move the whole shelf: rates up → spreads compress → REIT prices fall mechanically.

First used in: 2.2 · REITs: landlord without tenants