Le mie ricette per la real estate communityThe first pan-European quarterly Asset Level Index was launched on April 3 at the INREV Annual Conference in Venice. Hugely anticipated by the industry, the index already covers over 7,000 assets with a total AUM of over €150 billion, with the potential to become much larger and to provide even greater depth of insight.
The new index responds to an industry-wide requirement for a reliable and independently-managed asset performance indicator to track real estate market performance on an asset level across Europe, with greater granularity and consistency.
Based on five years of historical quarterly data, the new consultation index delivers data sets of pure real estate performance. Stripped of leverage and financial structuring, it provides a deeper understanding of drivers of real estate performance and risk. This will facilitate improved peer-to-peer and cross-border comparability; and enhance decisions about portfolio allocation and risk management. The index will also help to reduce information asymmetry between investors and asset managers and improve alignment of interest. Over time, it has the potential to link fund and asset-level data, providing hitherto unavailable performance attribution and reconciliation analysis.
The launch of the index comes at a key time for the industry, when institutional investors are increasingly focused on gaining access to more forensic data enabling them to make better informed investment decisions.
Following the industry’s initial request, INREV led the initiative to develop the index in full collaboration with 32 founding members. The launch of the index marks the culmination of an intensive three-year exercise by this dedicated group.
Commenting on the launch, Lonneke Löwik, INREV’s CEO, said: ‘The Asset Level Index is a game changer for the non-listed real estate industry. It has already received huge support, but the ambition is for the index to grow significantly and rapidly – we believe it could represent total AUM of around €500 billion within five years. The larger it becomes, the greater the benefit it will provide in terms of the quality and breadth of data which, in turn, could play a significant role in helping to unlock increased capital inflows into non-listed real estate. The index also has the potential to become global, enhancing overall transparency of the industry.’
Separately, INREV has also announced the launch of the INREV European Open End Diversified Core Equity (ODCE) Fund Index – the first pan-European performance index focused on this major group of funds. The index covers all 12 funds in this category in Europe, with a combined AUM of €24 billion at end 2018. It plugs an important gap for global institutional investors for whom data on these funds in the US and Asia Pacific, is already available. Like the Asset Level Index, the INREV European ODCE Fund Index adds significantly to overall levels of transparency in the non-listed real estate industry. Importantly, this group of funds is likely to be the first where the potential of the Asset Level Index to link asset and fund level attribution, is realised in the future.
The Asset Level Index and the INREV European ODCE Fund Index are the latest additions to INREV’s existing suite of regular indices.
Source : INREV