The net asset value (NAV) of a firm is the amount of money that would be left if it closed, sold its assets and paid its debts. This, divided by the number of shares in issue, gives you the NAV per share.

The NAV is often used to value firms with portfolios of instantly marketable assets, like property firms. Shares are referred to as trading ‘at a premium to’ (above) or ‘at a discount to’ (below) their NAV.

Real-estate investment trusts (REITS) tend to trade at less of a discount to the NAV than real-estate firms would on their own. This is because they allow firms to pool real estate assets that are worth more combined than individually, thereby spreading the risk of one project going wrong and offering predictable revenue.