As of today (2026-07-03), China Merchants Commercial REIT's weighted average cost of capital is 4.3%%. China Merchants Commercial REIT's ROIC % is 3.02% (calculated using TTM income statement data).
China Merchants Commercial REIT earns returns that do not match up to its cost of capital. It will destroy value as it grows.
*Note: The beta of this company cannot be obtained because it has a price history shorter than 3 years. It will thus be set to 1 as default to calculate WACC.
For a comprehensive WACC calculation, please access the WACC Calculator.
China Merchants Commercial REIT (FRA:5C3) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, China Merchants Commercial REIT's weighted average cost of capital is 4.3%%. China Merchants Commercial REIT's ROIC % is 3.02% (calculated using TTM income statement data).
China Merchants Commercial REIT earns returns that do not match up to its cost of capital. It will destroy value as it grows.
*Note: The beta of this company cannot be obtained because it has a price history shorter than 3 years. It will thus be set to 1 as default to calculate WACC.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year semi-annual average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year semi-annual average debt to get the simplified cost of debt.
Related Terms
China Merchants Commercial REIT WACC % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the REIT - Office subindustry, China Merchants Commercial REIT's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
China Merchants Commercial REIT WACC % vs REITs Industry
For the REITs industry and Real Estate sector, China Merchants Commercial REIT's WACC % distribution charts can be found below:
* The bar in red indicates where China Merchants Commercial REIT's WACC % falls into.
China Merchants Commercial REIT WACC % Calculation
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, China Merchants Commercial REIT's market capitalization (E) is €125.037 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year semi-annual average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Dec. 2025, China Merchants Commercial REIT's latest one-year semi-annual average Book Value of Debt (D) is €509.4253 Mil.
a) weight of equity = E / (E + D) = 125.037 / (125.037 + 509.4253) = 0.1971
b) weight of debt = D / (E + D) = 509.4253 / (125.037 + 509.4253) = 0.8029
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.485%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. China Merchants Commercial REIT's beta cannot be obtained because it has a price history shorter than 3 years. It will thus be set to 1 as default to calculate WACC.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.485% + 1 * 6% = 10.485%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year semi-annual average debt to get the simplified cost of debt.
As of Dec. 2025, China Merchants Commercial REIT's interest expense (positive number) was €14.155 Mil. Its total Book Value of Debt (D) is €509.4253 Mil.
Cost of Debt = 14.155 / 509.4253 = 2.7786%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 0.521 / -16.676 = -3.12%, which is less than 0%. Therefore it's set to 0%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
China Merchants Commercial REIT (FRA:5C3) has a WACC % of 4.3% as of Jul. 03, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on China Merchants Commercial REIT and its competitors. This is near median its historical median of 4.41. Over the past decade, China Merchants Commercial REIT's WACC % has ranged from 3.71 to 5.11. According to the industry distribution chart, China Merchants Commercial REIT ranks #144 out of 968 companies in the REITs industry, placing it in the top 14.9%.
Is China Merchants Commercial REIT's WACC % too high?
China Merchants Commercial REIT's current WACC % of 4.3% is near median its 10-year median of 4.41. Over the past 10 years, this metric has ranged from a low of 3.71 to a high of 5.11. The REITs industry median WACC % is 6.57. China Merchants Commercial REIT's value of 4.3% is 34.5% below this industry median. Based on the distribution chart, China Merchants Commercial REIT ranks #144 out of 968 companies in the REITs industry, which is in the top quartile — a strong position relative to peers. Overall, China Merchants Commercial REIT has a GF Score™ of 70/100, reflecting its overall financial health beyond just this single metric.
How does China Merchants Commercial REIT's WACC % compare to BXP and ARE?
According to the REITs industry distribution chart, China Merchants Commercial REIT ranks #144 out of 968 companies for WACC %. This places China Merchants Commercial REIT in the top 15% of its industry — outperforming the majority of peers. The industry median WACC % is 6.57. China Merchants Commercial REIT's value of 4.3% is 34.5% below this benchmark. Historically, China Merchants Commercial REIT's own WACC % has ranged from 3.71 to 5.11 over the past decade. While the company's 10-year median is 4.41 vs. the industry median of 6.57, China Merchants Commercial REIT has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a REITs company?
The median WACC % among REITs companies is 6.57, based on 968 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. China Merchants Commercial REIT's current WACC % of 4.3% is 34.5% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on China Merchants Commercial REIT and its competitors. For the REITs industry, the median WACC % is 6.57 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. China Merchants Commercial REIT's current WACC % is 4.3%, which is near median its own 10-year median of 4.41. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is China Merchants Commercial REIT stock overvalued right now?
China Merchants Commercial REIT (FRA:5C3) has a current WACC % of 4.3%. The stock's GF Value™ is €0.11, compared to a current price of €0.10 — trading 7.3% below its estimated fair value. The current WACC % is 4.3%, which is near median its 10-year median of 4.41 and 34.5% below the REITs industry median of 6.57. China Merchants Commercial REIT's overall GF Score™ is 70/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For China Merchants Commercial REIT (FRA:5C3), the current WACC % is 4.3% as of Jul. 03, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is China Merchants Commercial REIT (FRA:5C3) Overvalued in 2026?
Based on GuruFocus' analysis, China Merchants Commercial REIT stock appears to be undervalued.
The current stock price of €0.10 is trading 7.3% below its estimated GF Value™ of €0.11.
Key valuation signals for FRA:5C3:
WACC %: 4.3% (near median its 10-year median of 4.41)
GF Value™: €0.11 vs. price of €0.10 (7.3% below fair value)
Industry Position: 34.5% below the REITs median (#144 of 968)
No single metric tells the full story. See the FRA:5C3 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
China Merchants Commercial REIT Business Description
China Merchants Commercial REIT and its subsidiaries are engaged in the property investment. The operating business segments of the company are office buildings and shopping center. Its properties include New Times Plaza, Cyberport Building, Technology Building, Garden City Shopping Centre ,Onward Science And Trade Center and Technology Building 2 among others.
70GF Score
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