Asset Level Index - Data Collection, Validation and Quality

Which data fields do INREV intend to collect?

Link to the data delivery template.

How will data be collected?

Data will be collected via an online data input tool, where members will be able to upload the Excel data delivery template.  The system will then run a number of validations to ensure the quality of the data received.  Members will be asked to approve data before submission to INREV.

How will data validation be carried out?

The validation process will include three major steps:

  1. Systems based validation – the system will use rules-based algorithm to validate data.
  2. Member approval – the member will need to approve information before submission to INREV
  3. INREV verification – the INREV team will verify information before inclusion to the database

Can INREV use the fund level data for validations?

Yes absolutely, the INREV fund level data will be used for checks and balances to the asset level data.

How will data confidentiality be managed?

INREV will not disclose or share any asset level data provided by any company without the explicit approval of that company.

INREV will only use data provided by any company in a composite where the asset, the vehicle, the manager and any investor are not identifiable.  

What performance will be measured by the headline Asset Level Index?

The headline asset level index will measure performance of the market, which will include standing investments, transactions and developments.

What performance will be measured for individual assets?

Quarterly and annual performance will be measured net of costs.

What type of returns will performance measure?

Quarterly and annual performance will be measured by time weighted returns over the measurement period.

Income return, capital growth and total return will be calculated for the measurement period.


Asset Level Index - Project Governance

How is the project being governed?

A focus group, named the Asset Level Index focus group, consisting of INREV member volunteers was formed to work closely with INREV to carry out due diligence, evaluate the feasibility and to work on a proof of concept for the project.

The focus group has been evaluating key items such as data fields and definitions, calculation and methodology, validation and visualisation and the analysis and use of data. 

The focus group work alongside the INREV Performance Measurement committee.

This process follows a similar procedure to the development of INREV’s existing indices.

How many members are on the focus group?

Around 30 individual members representing 18 different companies have been working diligently on the proof of concept.  The focus group also includes NCREIF’s CIO (Chief Information Officer).

How often does the focus group meet?

Focus group calls have been taking place on a weekly basis, and members join the calls depending on the focus of the discussions taking place.

How is the focus group arranged?

The focus group is assigned an overall focus group chair to steer the calls.

The focus group is split into sub working groups to tackle different technical aspects of the project.  Each working group is assigned a working group chair and each group has specific objectives to tackle.

How are decisions made?

A three-layer approval process:

  1. Sub group approval
    1. decisions need to be approved by the working group before being brought to the asset level focus group
  2. Asset level focus group approval
    1. decisions are brought to the overall asset level focus group for approval being brought to the performance measurement committee
  3. Performance measurement committee approval
    1. decisions are brought to the performance measurement committee before being presented to the INREV management board

INREV’s management board are updated on a quarterly basis and provide approval for each major step in the project.


Asset Level Index - Commitments

What does the founding member commitment request entail for fund managers?

  1. to provide INREV with quarterly data for real estate assets that are under direct management for a minimum period of three (3) years from consultation launch going forward;
  2. to provide INREV with historical quarterly data for real estate assets that are under direct management for fa period starting from 31 December 2013;
  3. to pay a non-refundable one-off investment amount of EUR 10,000 that will be principally used to fund development costs.

Link to detailed commitment presentation.

Link to founding fund manager member commitment letter.

What does the founding member commitment request entail for investors?

  1. to pay a non-refundable one-off investment amount of EUR 10,000 that will be principally used to fund development costs.
  2. to motivate and provide permission for their fund managers to provide INREV with data for real estate assets that they are invested in. 

Link to founding investor member commitment letter.

Why does INREV need commitment from its members?

INREV is asking for commitments to safeguard against two major risks, financial risk and low coverage which will mean low representation of the market.

What commitment size is required to start this project?

A minimum of 25 signed commitments and commitment to deliver data on assets representing a total market value of at least EUR 100 billion.

How many members have already committed to support this initiative?

As of 31 July 2017, 28 members have submitted a signed commitment letter. Committed assets represent a total market value of EUR 150 billion as at end 2016 and at least 6,000 assets.


Asset Level Index - Project Scope and Deliverables

How has the scope of the asset level index project been defined?

The scope for the asset level index project is defined as follows:

  1. to produce a set of indices that measure the performance of real estate assets across Europe, with the potential to expand to global;
  2. to create an online tool that allows members to build their own customised index and
  3. to explore the feasibility of asset to fund level reconciliation.

What are the deliverables?

There will be three main deliverables:

  1. Quarterly and annual snapshots available to all market participants, both INREV members and non-members. Link to mock-up of a quarterly snapshot.
  2. Quarterly and annual publication report available to all INREV members. Link to mock-up of a quarterly report.
  3. Online Index Analysis Tool available to data contributing managers and investor members that grant explicit permission for their fund managers deliver data to INREV. Link to mock-up of Index Analysis Tool

What will be the start date of the index series?

Historical data collection is requested from 31 of December 2013, therefore the index history will start at 2014.

When will the Asset Level Index be launched?

Launch of the consultation is planned for the INREV Annual Conference 2019.