How we price units

Net asset value: the starting point

Every Royal Oak trust is priced from its net asset value, or NAV: the value of the trust’s assets, less its liabilities. Assets are carried in accordance with the trust’s valuation policy, with independent valuations obtained at set intervals and whenever a material event warrants one. Liabilities include the trust’s debt and accrued costs.

Acquisition costs, and why we amortise them

Buying real estate costs more than the purchase price: stamp duty, due diligence, legal and establishment costs are all real, and all paid at the start. If these costs were expensed on day one, the unit price would fall sharply at acquisition, and investors who joined at different times would be treated unequally.

Instead, acquisition costs are capitalised and amortised — spread across the expected life of the investment. Each unitholder bears a fair share of those costs across the period they are invested, which is the equitable approach when investors may enter at different points.

The unit-price formula

Unit price = adjusted net asset value ÷ units on issue

“Adjusted” means NAV after the treatment of acquisition costs described above as well as the deduction of an estimated sale spread. As valuations, income and amortisation flow through NAV, the unit price moves with them.

What to expect from an income asset

For a stabilised, income-producing asset, expect a shallow early dip: acquisition costs amortise ahead of the first revaluation, so the unit price typically drifts slightly below the issue price in the early period. As independent revaluations flow through NAV — reflecting leasing, rent growth and market movement — the unit price recovers and, where value has genuinely been added, rises above the issue price. Distributions are paid from income along the way and are separate from the unit price.

What to expect from a development or value-add asset

Development assets behave differently. During delivery, the asset is typically carried at cost as inventory, with a market-value adjustment recognised as the project de-risks. Much of the embedded development margin is realised at completion — when the finished asset is revalued or sold — rather than accruing smoothly month by month. A flat unit price during construction is not a project standing still; it is margin waiting for the milestone that proves it.

The core message: read the lifecycle, not the quarter

Unit-price movements in closed-ended unlisted trusts are best understood across the full investment lifecycle — from acquisition, through the value-creation period, to realisation — not quarter to quarter. An early dip usually reflects cost amortisation, not lost value; a large uplift after a revaluation event reflects the milestone, not a single remarkable quarter; and no interim NAV movement is a realised return until the asset is sold and capital comes back.

That is also why Royal Oak labels every published figure as realised, unrealised or a target — and why unrealised NAV movements on active vehicles, such as those shown for the Office Unit Trust 1 andIndustrial Trust 52, must never be read as annual rates or as money in the bank.