After more than a year of research, the Asian and European Associations for Investors in Non-listed Real Estate Vehicles (ANREV and INREV) and the National Council for Real Estate Investment Fiduciaries (NCREIF) have announced the initial results of their Global Fund Index.
The initial results showed global returns over a three-year annualized period totaled 7.64 percent. One-year annualized returns were slightly lower at 5.82 percent, but figures did improve in the first half of 2013, reflecting “improved market conditions.”
Indeed, the global returns percentage fell to a three-year low in Q4 2012, to approximately 0.8 percent. By Q2 2013, however, the global return figure had shot up to 2.3 percent, it's highest level since Q2 2011.
The strong returns were primarily fueled by the strong performance of the US and Asian markets, which showed 11.33 percent and 8.64 percent returns over a one-year period, respectively. Europe, on the other hand, lagged far behind with only a 0.47 percent return over one year.
However, even Europe began showing improvement in 2013. In Q2 2013 returns reached a two-year high for the continent, totaling 0.73 percent. That is the highest return figure for Europe since Q2 2011’s 0.85 percent.
At this point, the Index is comprised mostly of data from core funds, though the three organizations are hoping to include value-added and opportunistic funds in the mix at a later date. The 363 participating funds have assets under management totaling $420 billion.
“This initiative also helps to position non-listed real estate funds on a more equal footing with other asset classes and reinforces their relevance and value for institutional investors as part of a balanced portfolio,” said Casper Hesp, the director for research and market information for INREV.
The non-profit organizations teamed up for the launch of the Index at the ANREV Annual Conference in Singapore this week, after announcing their cooperation for this Index in August of last year. The firms are currently seeking feedback on the initial results of the research “to ensure the final Index is as comprehensive and useful as possible, ahead of its official launch in April 2014,” according to a joint statement.
“This Index marks an important milestone in the evolution of the non-listed real estate industry, particularly in terms of three industry associations collaborating to improve data quality and transparency globally,” Patrick Kanters, managing director of real estate and infrastructure at APG Asset Management, said in the statement.