INREV names new chairman

At its third annual conference, INREV has named a new chairman, proposed new protocol for due diligence and released European fund returns for 2006.

INREV, the European Association for Investors in Non-Listed Real Estate Vehicles, announced today that its chairman Michiel Olland has stepped down. Johan Van der Ende, 48, the chief investment officer for strategy and structured investments at Dutch pension fund PGGM, has taken over the top spot.

The trade group announced the change in Madrid at the start of its third annual conference, where 350 delegates have convened at the Westin Palace Hotel—some 100 more than attended last year’s event in Rome.

Outgoing Olland steps down after leaving Dutch pension fund giant ABP to join SNS Property Finance earlier this year. At ABP he was executive vice president for real estate in Europe and Asia Pacific. He joined SNS in February as director of Southern Europe and new markets. He headed the position at INREV for four years.

 “The position of the chairman has evolved, in line with the development of the association from a managerial to a more representative role, as INREV’s management board monitors the association’s performance and overseas strategy,” Olland said. “Because INREV is an investor-driven organization, I am delighted that Johan is coming from one of the major institutional real estate investors.”

As well as raising the profile of the unlisted real estate sector, INREV has been striving to improve issues relating to transparency and corporate governance via a series of guidelines. To further that aim, today it launched a due diligence protocol for non-listed institutional real estate funds.

“The current due diligence system creates significant bottlenecks,” said Jens Christian Britze, a member of INREV’s due diligence protocol working group.

The groups suggests a standard questionnaire for investors to evaluate, among other things, a fund manager’s structure, strategy and real estate business. It also said private placement memos could be standardized if fund managers presented the same uniform headings for the different sections of a fund memorandum. However, members rejected PPM standardization, citing difficulties as each fund has their “own style and technique.”

As well as announcing a new chairman and the unveiling of a protocol, INREV also revealed that non-listed institutional real estate funds in Europe produced average total investment returns of 20.9 percent in 2006, slightly down from 22 percent in 2005.

“I hope we see a gradual cooling off in the market,” said INREV chief executive Lisette Van Doorn. “One would expect the median long-term figure for the industry to be somewhere in the range of 10 to 14 percent.”

Norway led the way in terms of total investment returns in local currency, returning 29.4 percent, followed by France, Germany and the UK. Retail property was the best performer for cross-border funds, delivering 20.4 percent. In the UK, offices proved the top performer with 30.4 percent returns.

Coincidentally, delegates have arrived in Madrid amid a crisis of confidence in the Spanish residential market, with shares in the major residential property companies plummeting. Spain has enjoyed a 10-year bull run in terms of residential property values, but now faces concerns about oversupply.

Some delegates are privately suggesting there could be a crash in the Spanish residential and commercial property sectors, too, which could lead to distressed sales and opportunities for private equity real estate firms.