In the summer of 2015, Deka and Deutsche Bank, members of both INREV and the BVI, approached INREV to discuss requirements from the BVI’s risk controlling group for a comprehensive set of global indices to measure the performance of real estate assets.
The initiative rapidly gained traction and support from INREV members and other industry groups outside of Germany (ROZ, IVBN, UK Data Quality Group). A focus group of c. 30 individuals from 18 companies and NCREIF, has been working together to test the concept and viability of asset level performance indices.
The Asset Level Index initiative represents a major step forward in the transparency of the non-listed real estate industry, with the key motivations for this initiative being:
- The cost-effective provision of a pan-European – potentially Global – Index;
- The fact that INREV’s existing, proven and easy to use analytical tools would apply to the Asset Level Index, with instant access and flexible index customisation rating high;
- The potential for Asset Level to Fund Level reconciliation, regarded as a significant innovation.
INREV’s advantages include its experience in index construction and production, and its good working relationships with NCREIF and ANREV, which could provide the opportunity to extend an asset level index globally.
INREV therefore proceeded to undertake the Asset Level Index initiative, as a direct response to requests from and a need within the real estate industry, for additional analysis tools to help explain the drivers of fund performance.
The Asset Level Index initiative delivers on INREV’s mission to further transparency of the non-listed industry; it further satisfies the strategic objective of further developing global market information to support peer-to-peer comparison. Asset level indices are a natural extension of INREV’s current suite of market information.
At the INREV Annual Conference 2016 INREV announced that it would commence on a proof of concept phase to test the concept and viability of developing an asset level performance index. [View press release]
At the INREV Annual Conference 2017 presented an update on the status of the project and made a request for members to participate to this strive towards transparency for the real estate industry. [View presentation]