Which concept reflects a property’s potential return relative to the cost of its replacement?

The concept that reflects a property's potential return relative to the cost of its replacement is best captured by the Q ratio. This ratio compares the market value of a company's assets to the replacement cost of those assets. In the context of real estate, it helps investors assess whether a property is undervalued or overvalued by examining the relationship between its market value and the cost to replace it. An increasing Q ratio suggests that the market is favoring current investments, indicating greater potential for returns.

While yield pertains to the return on an investment compared to the investment's cost, it does not specifically address the aspects of replacement costs. Market analysis involves assessing various aspects of the market but does not specifically reflect the return in relation to replacement costs. The capitalization rate relates to the income generated by a property against its purchase price or value but focuses more on current income rather than replacement costs. Therefore, the Q ratio specifically addresses the relationship between market value and replacement cost, making it the most appropriate answer.