New global fund index for real estate investment performance being created
A new Global Fund Index which will measure real estate investment performance of non-listed real estate vehicles on a global basis for the first time is to be created.
The Asian and European Associations for Investors in Non-listed Real Estate (ANREV and INREV) and the National Council for Real Estate Fiduciaries (NCREIF) have agreed to co-operate to create the new index. It will reflect a substantial investment universe and allow the non-listed real estate sector to be analyzed and compared against other asset classes globally in addition to offering valuable new insights for investors and asset allocation. ‘This is a great initiative. A global index will have far reaching benefits for the whole industry, particularly in terms of establishing universal performance benchmarks and standardization, which is a major focus for INREV. It will also help with specific issues such as improving asset liability modeling,’ said Patrick Kanters, chairman of INREV and managing director of global real estate at APG Asset Management. Well established regional fund indices are already in place at NCREIF and INREV, and an inaugural Asian fund index launched by ANREV in Asia in 2011. The combined Global Index will have a potential of around 670 funds with a total estimated Gross Asset Value of €519 billion. ‘The aim of this important new initiative is to improve transparency of real estate as an asset class and to help our members make more informed investment decisions. It is vital, as an industry, that we work towards being able to make more robust global and intra-regional comparisons,’ said Mark Roberts, managing director and global head of research at RREEF Real Estate and chairman of NCREIF. According to Peter Steil, NCREIF’s chief executive officer it represents the logical integration of the organisations in terms of meeting the data collection and information needs of their expanding global activities and to serve as the basis for further collaboration in the future. ‘The majority of large institutional investors already invest globally or have the intention to do so and in addition many are members of our three organisations. It makes sense for us to work towards a global index which we believe will be of great value and use to both our membership base and the wider industry,’ explained Willem de Geus, Singapore based managing director of Morgan Stanley Real Estate and deputy chairman of ANREV. Global Index Working Group has been formed with representatives from all three bodies to guide the process, with the aim of presenting initial index results at the ANREV Annual Conference in Hong Kong in October, and the NCREIF Fall Conference in Florida in November.