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Industry backs INREV’s €150bn European real estate index

The European Association for Investors in Non-listed Real Estate vehicles has started work on an index which firms such as M&G and Allianz say will bring transparency to the industry and help to inform investors. 

INREV has begun building a pan-European index that will measure the performance of around €150 billion worth of real estate assets.

The association said the Asset Level Index was created in response to requests from the European real estate industry for additional tools to help explain the drivers of asset performance and would provide a comprehensive set of indices to track and analyze real estate assets’ performance.

INREV received financial commitments from 28 of its members, including institutional investors and real estate investment managers, to put the index together and said it now had enough data to create the index, which at present contains data relating to around 7,000 real estate assets across Europe.

INREV said it was planning to launch a consultation edition of the index in 2019 and added that it could ultimately become a global metric with input from sister associations NCREIF, in the US, and ANREV, in Asia Pacific.

“The Asset Level Index fills a major gap highlighted by the industry,” said Henri Vuong, INREV’s research director. “It also delivers on INREV’s strategic objective to provide market information that supports peer-to-peer comparison.”

The index has already received support from the property industry with firms such as Allianz and M&G backing the venture.

Nick Blakemore, director of portfolio analysis at M&G Real Estate, said the number of commitments received by INREV demonstrated the desire for such a metric. “Twenty-eight signed commitments from across Europe shows what a huge appetite the industry has for robust asset level analysis,” Blakemore said. “With 7,000 assets already, I expect the scale of the founding index will only increase over time providing an even greater wealth of performance data.”

While Matthias Pilz, head of special projects at Allianz, said the endeavour represented a “key step” for the real estate industry to create transparency and enable investors to understand the factors behind the performance of their investments.

INREV already runs two worldwide indices, the vehicle-focused Global Real Estate Fund Index (GREFI) and the LP-focused Global Investor Real Estate Performance Index (GIREPI). GREFI is jointly produced by INREV, ANREV and NCREIF and measures the performance of non-listed real estate vehicles on a global scale. While GIREPI, launched at last year’s INREV conference in Vienna, enables investors to track and compare the performance of their real estate portfolio against their peers.

The association also produces the INREV Annual Index, which measures Net Asset Value based on performance, and the INREV Quarterly Index.