Reporting

The basis, frequency and timing of delivery of the audited and non-audited financial statements, and management reporting for investors should be defined in the fund documentation.

The quantitative information presented in the SDDS should be provided either using the SDDS template proposed by INREV or otherwise disclosed in annual and interim reporting to investors.

Full year-end audited financial statements should be provided to investors. These should contain:

• Balance sheet;
• Income statement;
• Statement of changes in equity;
• Statement of cash flows;
• Notes to the financial statements.

SDDS references:
1.13 Accounting standards, 1.15 Vehicle Auditor, 3.3 Cash and cash equivalents, 3.4 Total Number of Outstanding Shares, Section 11. details of fees paid to the manager and affiliates, 13.6 Net Capital Contributed - During the Reporting Period.

For interim reports, use the same terminology and KPIs as used in the annual report. If new terms or KPIs are used, the manager should explicitly define them.

SDDS references:
Same as RG06

For annual reports, describe the overall status of the vehicle’s INREV compliance.

In doing so, disclose the level of compliance with INREV Guidelines by module. Include any relevant explanations, reconciliations and calculations as appropriate.

Management (in the event that, for instance, INREV corporate governance framework is not being adopted) and/or non-executive officers/those in charge of governance should review this statement and the basis for making it.

For interim reports, disclose level of compliance with INREV interim reporting guidelines. Reference should be made to annual report for detailed description of the level of compliance with reporting requirements

Management (in the event that, for instance, INREV corporate governance framework is not being adopted) and/or non-executive officers/those in charge of governance should review this statement and the basis for making it.

Contact details of the vehicle.

SDDS references:
1.3 Contact Person Name and 1.4 Contact Person Telephone

Annual

Interim

Describe material changes

Describe the vehicle’s governance framework and the organisation of management and administration. For example, identify the AIFM, administrators, trustees, depositories, general partners, risk managers, investment advisors, portfolio managers, asset and property managers, valuers and other key functions as appropriate.

SDDS references:
1.2 Investment Manager

Annual

Interim

Describe material changes

Annual

Interim

Describe material changes

Annual

Interim

Describe material changes

Annual and interim reports should describe the level of compliance with the corporate governance framework defined in the fund documentation.

Annual

Interim

Describe material changes

Present a short, high level summary of the vehicle strategy.

SDDS references:
1.10 Style - defined by Investment Manager, 1.11 Style of the vehicle according to the INREV Style Classification

Annual

Interim

Describe material changes

ESG-LTS 1.1 Requirement – Vehicle Long Term Strategy

Describe the overall approach to setting a long term ESG strategy for the vehicle. Make reference to the overall governance approach, which is covered in the INREV Corporate Governance Guidelines.

Detail the long term (2 to 10 years) ESG strategy for the vehicle. As best practice you can consider the aspects set out below:

Asset management ESG strategy:

• Provision of asset sustainability action plans, possibly integrated into asset business plans, to describe how the vehicle’s long term ESG strategy is implemented on asset level.
• Provision of new build and/or refurbishment ESG strategies.
• Provision of an ESG strategy for acquisitions.
• Provision of a strategy to reduce and/or measure energy, GHG emissions and water and waste measurement.

ESG references:
ESG-LTS 2.1 Best practice

Annual

Describe key milestone dates in the life of the vehicle (including vehicle term, investment period, closing dates, etc).

SDDS references:
Section 2 Critical Dates

Annual

Interim

Describe material changes

Annual and interim reports should disclose any changes to the capital structure of the vehicle.

Annual

Interim

Describe material changes

In a tabular format, disclose the status of investor commitments and capital invested in the vehicle, and in particular:

• undrawn commitment;
• commitment drawn during the period (linkage should be made with underlying transactions);
• returns of capital/redemptions in the period;
• capital calls or subscriptions recorded subsequent to the period-end but before the release of the report;
• details of redemption requests received but not processed as at the date of the report, and plans to meet these requests.

In addition, the manager should disclose the expected drawn commitments, returns of capital/redemptions, capital calls and redemption requests for the following period. The manager may include assumptions used to determine these projections.

SDDS references:
Section 12 Capital Commitments & Secondary Market Activity, Section 13 Capital Contributions & Other Payments to Investors and Section 15 Capital Flows of the Vehicle (for calculation of the INREV Index)

Summarise and comment on key investor returns and related metrics which are defined in section 7 of the SDDS (including comparison with targets, points of reference and indices when relevant).

SDDS references:
Section 7 Performance (according to INREV Guidelines)

Annual

Interim

Disclose and discuss details of share class NAVs (accounting NAVs, trading NAVs, INREV NAVs as applicable) and variances since prior period-end.

Annual

Interim

Disclose and discuss distributions made during the period and subsequent to the period-end (link with underlying transactions such as property disposals where relevant).

SDDS references:
Section 14 Distributions

Annual

Interim

Summarise and discuss macro-economic factors which have, or may have, a material impact on the results of the vehicle.

This should include information such as economic growth factors and their impact on the demand for new rentals, the supply of property or availability of development opportunities. Include also details of material changes in the tax and regulatory environment and debt financing conditions, such as movements in interest rates and financing terms.

ESG-ANN 1.1 Requirement – Annual Objectives

Based on the strategy of the vehicle described in ESG-LTS 1.1, set out the annual objectives and associated targets for the coming 12 month reporting period. As best practice you can consider the aspects set out below:

Asset management ESG initiatives:

• The targets that should be reached within the next 12 months with the individual asset sustainability plans, set out the impact on portfolio level;
• New build and/or refurbishment ESG initiatives;
• ESG initiatives for acquisitions;
• Initiatives to reduce and/or measure energy, GHG emission, water and waste measurement;
• Green building certificates and energy ratings, i.e. the vehicle’s approach regarding green building certificates and energy ratings, including the current state, the certification scheme(s) and the percentage of the portfolio certified. Set out related ambitions.

ESG references:
ESG-ANN 2.1 Best practice

Tabulate for clarity a summary of significant events affecting the vehicle during the period as well as significant events anticipated in the 12 months from the balance sheet date. Provide a brief commentary on significant activities of the vehicle including acquisitions, disposals, distributions to investors, and changes to the overall financing or capital structure during the period.

Analyse the performance of the vehicle during the period by reference to relevant vehicle-level KPIs defined in sections 3.1, 3.2 and 5 of the SDDS, which include information such as the NAV, key financial ratios, valuation results, realised gains and losses and information related to operating results.

SDDS references:
3.1 Gross Asset Value of Vehicle (GAV), 3.2 Net Asset Value of Vehicle (NAV) and Section 5 Result of Vehicle per Accounting Standards

ESG-ENV 1.1 Requirement – Environmental Data

Absolute data and like-for-like

Disclose absolute environmental data and like-for-like data for the proportion of the vehicle’s portfolio that is in the fund manager’s operational control.

This should cover:

• energy;
• GHG emissions;
• water;
• waste.

Intensities

Report the intensity ratios for energy and GHG emissions per property type. As best practice, the calculation methodology should be detailed, including applied normalization factors and which types of energy / types of GHG Emissions are included in the ratio.

The environmental data should be presented in line with GRESB or GRI / EPRA methodology.

Please disclose which methodology has been used.

ESG references:
ESG-ENV 2.1 Best practice

Describe and comment on the structure of fee arrangements with managers and affiliates (including details of any relevant capitalisation or disbursement programs, year-end balances, amounts earned, accrued, paid or clawed back). Link accrued and un-accrued amounts with the realisation of performance criteria. When applicable, this description should include details of:

• vehicle management fees;
• asset management fees;
• performance fees;
• property management fees;
• acquisition fees;
• disposal fees;
• development fees;
• financing fees;
• other related-party fee arrangements.

Refer to the relevant sections of the financial statement disclosures for details as appropriate.

SDDS references:
Section 18 Investor's Portion of Fees to the Manager and Affiliates 

Interim

Describe material changes

Disclose the NAV of the vehicle and the basis of calculating it. Disclose to what extent the INREV NAV guidelines have been used to determine such NAV, and include details of adjustments made to reconcile the NAV with the financial statements. Include a description of the judgments and estimates used when determining the INREV or other NAV.

SDDS references:
Section 4 Reconciliation from Reported Net Assets to Fair Value (according to INREV Guidelines)

Interim

Disclose the NAV and material changes to methodologies and assumptions

Discuss the current period performance in the context of the track record of the vehicle (for instance, over the last five years).

Describe all significant subsequent events affecting the vehicle since the period-end and comment on their impact on vehicle performance if relevant.

Describe the likely developments in the vehicle’s business in the foreseeable future and how this is aligned with achieving the overall vehicle objectives.

Describe and comment on current developments in the vehicle’s investment property portfolio by reference to, for example, occupancy level, tenant profile by area occupied, average rent, the percentage of newly developed property that has been let or sold, etc.

SDDS references:
9.4 Total Number of Properties, 9.9 Lease Expiries < 2 years (based on rent) and 9.10 Weighted Average Unexpired Lease Term (WAULT)

Describe the business rationale for any significant acquisitions or disposals during the period, and their impact on the vehicle’s financial position and results.

SDDS references:
Section 8 Investment Activity during the Reporting Period, 5.9 Unrealised Capital Gain/(Loss) and 5.10 Realised Capital Gain/(Loss)

For interim reports, show a summary of the portfolio allocation by sector and geography.

SDDS references:
Portfolio allocation sheet

For annual reports, show a summary of the portfolio allocation by sector and geography and comment on it in the context of the investment strategy of the vehicle (refer to the detailed portfolio allocation sheet in the SDDS).

SDDS references:
Portfolio allocation sheet, number and amount of acquisitions and disposals (8.1, 8.2, 8.4 and 8.5)

Summarise and comment on property valuation methods used for investment properties, properties under construction, land and ground leases. Include information on the methodologies used and the key market inputs and assumptions such as yields, discount or capitalisation rates. Describe any specific or special assumptions used in the property valuations such as assumed disposal scenarios, assumed capital expenditure and the treatment of transfer taxes.

SDDS references:
1.17 RICS Rules Compliant, 9.1 Total Fair Value of Investment & Development Portfolio, 9.2 Fair value of investment portfolio, 9.3 NOI yield and 9.5 Gross Leasable Area

Interim

Describe material changes

Disclose the proportion of the property portfolio which has been subject to an independent external valuation along with references to the name and qualifications of the valuers, and the date of such valuations. Include details of any modifications or reservations disclosed in the valuers’ reports.

SDDS references:
3.5 % of Real Estate Assets Valued during the Reporting Period, Externally and 3.6 % of Real Estate Assets Valued during the Reporting Period, Internally

Provide an analysis of like-for-like movements in the market value and rental income of properties held in the current and prior periods.

Comment on the development of rental growth and expected rental values by sector/geography. The market data provided should be relevant to the specific activities of the vehicle.

Interim

Describe material changes

Describe recent leasing renewal activity, including incentives given, rent-free periods and tenant improvement programs and expected future changes by reference to market trends in new lease terms.

Interim

Describe material changes

Summarise and comment on the development of vacancy rates and its impact on vehicle performance and future prospects.

SDDS references:
9.6 Net Leasable Area, 9.7 and 9.8 Occupancy, 9.16 Top Tenants (percentage of gross rental income)

Interim

Describe material changes

Discuss the developments of property yields, including yields by sector and geography.

SDDS references:
9.3 NOI Yield

Interim

Describe material changes

Discuss the developments of other key property information by sector and geography, when relevant.

Interim

Describe material changes

Identify and comment on rental concentration risk (either by expected rental value or actual rental value).

Annual

Interim

Describe material changes

Describe and comment on the level of property operating costs and, if significant, discuss the impact of specific factors such as service charge recoveries, bad debt write-offs and other property operating costs related to the vehicle’s performance.

If material, describe the impact of development activities on the vehicle by reference to, among other things, its investment strategy, development pipeline, stage of completion of developments, status of the sale of units or rental strategies.

ESG-POR 1.1 Requirement - Annual Portfolio Information

Report against annual objectives and associated targets set for the vehicle as set out in ESG-ANN 1.1.

ESG references:
ESG-POR 2.1 Best practice

Discuss and quantify significant capital expenditure programs either planned or being undertaken during the period for existing properties, such as renovations, extensions and improvements.

SDDS references:
8.3 Amount of Capital Expenditure

Quantify the amount of property development being undertaken during the period.  Include details of the amount of properties completed and either transferred to investment properties or sold during the period. Include details of development costs, related commitments, and the method of accounting for property under development.

SDDS references:
9.11 Fair Value of Development Portfolio, 9.12 Current Development Exposure as % of GAV, 9.13 Projected Percentage of Current Remaining Undrawn Commitments to be Invested in Future Development Projects and 9.14 Cost of Development Portfolio

Describe and quantify the vehicle’s position in joint ventures and associate investments. Include details of, among other things, the methods of accounting for such positions, how they impact the overall financial and risk profile of the vehicle, and their business prospects.

Describe the principal risks faced by the vehicle. Describe and analyse the vehicle’s current exposure to such risks. Principal risks will cover, among others, areas such as:

• market risks (yield shifts, rental income, voids, etc.);
• credit and counterparty risks (exposure to tenant debtors, financial institutions etc.);
• liquidity risks (including debt maturity, covenant breaches, redemption requests and the financing of future contractual commitments);
• interest rate risks (exposure to floating vs. fixed rate debts);
• foreign exchange risks (including details of hedging strategy and unhedged exposures);
• operational risks (tax, regulation, key employees, reliance on service providers or key advisors, etc.).

Exposure to shareholder loans should be analysed separately from external loans.

Interim

Describe material changes

Describe the overall organisation of the risk management function and refer to key policies and procedures to monitor and mitigate exposures to key risks and uncertainties.

Interim

Describe material  changes

In a tabular form, give details of the overall financing structure of the vehicle. Include information such as financing costs, security arrangements, recourse arrangements, maturity, and interest and loan amortisation terms. Refer to the financial statement disclosures as appropriate.

SDDS references:
Section 6 Financing

Interim

Describe material  changes

Comment on the overall financing structure of the vehicle by reference to its overall strategy and future prospects.  Such commentary should provide information on the status of material new debt arrangements, early debt reimbursements, and debt restructuring programs relevant to the period or anticipated in the foreseeable future.

SDDS references:
Section 6 Financing

Interim

Describe material changes

Describe and comment on the vehicle and SPV’s current key financing ratios, for example, interest service coverage ratio, property level loan to value, gearing ratio and the vehicle’s general level compliance with such ratios.

SDDS references:
Section 6 Financing

Interim

Describe material changes

Describe and comment on the use of derivative financial instruments and their impact on the vehicle’s performance. Disclose their key terms and fair values and their treatment in the financial statements and NAV.

SDDS references:
Section 6 Financing

Interim

Describe material changes

In exceptional circumstances, deviations by managers from property valuations as determined by external property valuers must be clearly explained and disclosed.

If there is a disagreement between the manager and the property valuer on the market value parameters, these parameters must be clearly explained and disclosed. We expect these deviations and disagreements to occur only very rarely and if so, more in relation to opportunistic investments, where for example the manager and the external valuer have different views as to the likelihood of a particular event occurring (because, for example, the manager is in discussion with governmental bodies, potential buyers or tenants).

Another example of deviation could be related to disagreement about value changes if there is a considerable time period between the actual date of external valuation and a later reporting date.

Whatever the circumstances, appropriate internal procedures (including escalation measures) should be followed by the management in the event of valuation adjustments.

INREV NAV disclosure requirements

Managers should make the following disclosures related to the NAV computation:

• the reconciliation between GAAP NAV and INREV NAV should be presented in line with guideline NAV 2;
• managers should explain material estimates and computation methodologies to enable investors to understand the components of the reconciliation between GAAP NAV and INREV NAV.

Explanatory notes to the reconciliation should describe key assumptions, methods used, and in particular:

• the basis for reclassifying certain shareholder loans or hybrid capital instruments as a component of equity;
• the basis for the determination of fair value of investment property, self-constructed or developed investment property, property that is leased to tenants under finance lease, investment property held for sale and real estate held as inventory;
• the basis of the estimate of other investments in real estate assets;
• the basis for the determination of the fair value of indirect investments not consolidated;
• details of the methodology used to calculate the fair value of financial assets and liabilities;
• the basis of the estimate of the fair value of construction contracts with third parties;
• the basis of the estimate of the fair value of contractual fees;
• details of the assumptions used to estimate the fair value of deferred tax and the tax effect of INREV NAV adjustments. Such disclosure gives an overview  of the tax structure including, for instance, details of the property ownership structure, key assumptions and broad parameters used for estimating deferred taxes for each country, the maximum deferred tax amount estimated assuming only asset sales (i.e., without taking into account the intended method of disposal) and the approximate tax rates used;
• reasons for making adjustments to the carrying value of subsidiaries having negative equity (non-recourse);
• under IFRS, the fair value of investment properties does not take into account the expenses incurred by the seller when selling a property. As with IFRS, no adjustment is required to include a provision for such costs in the INREV Guidelines, unless they are held for sale. The manager should, however, estimate and disclose the amount of disposal costs likely to be incurred on the sale of properties, taking account of the intended method of exit, assuming an exit without duress and in the current market environment;
• set-up costs - description of impairment and reasons for booking if applicable;
• set-up costs - description of the reasons for departure from the five year amortisation period if applicable;
• acquisition expenses - description of impairment and reasons for booking if applicable;
• acquisition expenses - description of the reasons for departure from the five year amortisation period if applicable.

Interim

Describe material changes in methodologies and assumptions

A disclosure table should be presented that provides an analysis of all the components of the fees charged by the manager, including any element of performance fee or carried interest or any other such arrangement, or by any other affiliate or related party of the manager.

See table in Fee and expense metrics module.

SDDS references:

11.17 NAV TER before Performance Fees, 11.18 GAV TER before Performance Fees, 11.19 NAV TER after Performance Fees, 11.20 GAV TER after Performance Fees, 11.23 REER, and Section 18 Investor's Portion of Fees to the Manager and Affiliates