An accretive acquisition, is an investment that increases the acquiring entity’s earnings per share (EPS), or distribution per unit (DPU). It is also sometimes referred to as a yield-accretive acquisition.

The term is mostly seen in announcements for a proposed property, or company acquisition.

In non-real estate securities investments, accretive acquisitions refer to instances when an acquisition increases the earnings per share (EPS) of the acquiring firm.

In the context of REITs and real estate securities, a yield-accretive acquisition is the buying of a property that results in an increase of the acquiring REIT's distribution.

REIT investors generally look forward to well timed yield-accretive acquisitions. In the immediate timeframe, acquisitions of these nature increase the yield that they enjoy from their shareholdings, and this will generally drive the price of the stock up.

The opposite of yield-accretive acquisition would be a dilutive acquisition.

This entry is part of REITsWeek's glossary of REITs and real estate investment terms.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.

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