Reporting

Reporting Introduction

Make sure your reporting is audit-ready

The Reporting module sets the standard for the transparent investment vehicle and forms the backbone of the INREV Guidelines. Its reporting requirements reflect industry best practice, and their disclosure is mandatory for INREV compliance.

Clear reporting is essential for maintaining good communications between investors and managers. The Reporting assessment makes it possible to set up a comprehensive reporting framework for any type of investment vehicle, quickly and easily.

The Reporting module has been designed to help managers provide the transparency that today’s investors insist on. Transparent reporting in turn gives investors the confidence that managers are operating their portfolios properly.

Reporting Committee

The committee aim to improve the consistency and presentation of information and encourage greater transparency in reporting to investors and the market in general.

A clearer lens on investor reporting

The SDDS is increasingly important to the industry since its launch in 2012 and now moves onto a higher plane.

Videos

The Reporting Guidelines in summary

Michael Hornsby presents the reporting module. The summary includes the contents of the reporting guidelines and describes whom they apply to.

Assess your Reporting

Benchmark your investment vehicle and determine your compliance rate with the INREV Guidelines via our new tool.

Reporting News

Implementing the SDDS is easy. We have released a new implementation kit.

Useful information

Download the SDDS 3.1. The template is used for disclosing financial information, including the INREV NAV.

Our Trends in Investor Reporting report provides insight into current market practices in investor reporting in Europe.

If you have any questions, please contact professional.standards@inrev.org or phone +31 (0)20 235 8600

Introduction Reporting

RG-I01

In principle, managers should report basic data annually including the characteristics of a vehicle, commentary on vehicle performance and an analysis of the relevant KPIs. The annual report also informs investors about the vehicle’s investment strategy, risk policies and exposures and how the manager has complied with its business objectives and policies.

The annual report is commonly composed of the annual review of the performance and activities of the vehicle for the year and the financial statements prepared under relevant GAAP. As well as an annual report, managers should provide interim reports to investors. The frequency and the level of detail of interim reporting should be defined in fund documentation. Interim reports commonly aim to update investors on the activities and performances of the vehicle during the interim period covered, and provide details of any significant changes that have or could have a material impact on the vehicle’s organisation, governance and risk profile. As well as interim reports, there may be other more informal investor updates and ‘flash’ reports which are prepared on a more frequent basis (e.g., monthly), which are outside the scope of the guidelines.

Quantitative data and KPIs, as defined in the Standard Data Delivery Sheet (“SDDS”), are an integral part of investor reporting under these guidelines and such information should be included in the reports to investors. This data can be presented in a separate attachment to the annual or interim reports (using the SDDS template) or embedded into the relevant section of the report itself depending on the manager’s preference.

For convenience, the reporting guidelines are grouped into the following sections:

Content and frequency of reporting;
General vehicle information, organisation and governance;
Capital structure and vehicle-level returns;
Manager’s report;
Property report;
Financing and financial risk management.

Annual and interim reporting to investors may include audited annual financial statements or abridged interim financial statements prepared in accordance with the appropriate generally accepted accounting standards. The fund managers are free to present the INREV report disclosures as a single package with the audited financial statements or in two separate documents. Some managers may also opt to provide investors full financial statements on an interim basis. Such financial statements may contain some of the information required to be disclosed by these reporting guidelines and can be referred to as appropriate. Information in the respective financial statements should be consistent with information presented in annual or interim reports as a whole.

The reporting guidelines focus on the content of investor reports but do not prescribe the organisation and format of such reports.

The INREV SDDS is a standardised data tool that provides investors with the main financial management information they require in a format that allows them to easily upload the data into their own systems. Each reporting requirement has been referenced to relevant SDDS data and shows the relationship between the content of annual and interim reports.

The principles and guidelines for reporting are listed below. The frequency column indicates whether the guidelines are an annual reporting requirement or an interim reporting requirement only. Where appropriate, further explanation is provided to assist your understanding. In addition, a tools and examples section contains a debt and derivatives disclosures note, a reporting self-assessment tool, the SDDS template, and examples for a sustainability report and reporting on capital calls and distribution.

Principles

RG-P01

Annual and interim reporting should be consistent, transparent and provide meaningful information to investors.

RG-P02

The manager’s report should contain information relevant to gaining an understanding of the overall performance of the vehicle and factors that may affect performance in the future.

Guidelines

Fund documentation for reporting framework

RG01

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 manager should provide at least one interim report to its investors, in addition to the annual report.

Annual

Interim

RG02

For annual reports, define any terms or KPIs not already included in Definitions.

Annual

Content and frequency of reporting

RG03

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.

Annual

Interim

RG04

The financial statements provided in the annual report to investors should be audited.

Annual

RG05

Elements of the overall package of annual and interim reporting to investors, however configured, should be internally consistent.

For instance, information presented in the manager, property and other reports should be consistent with information in the SDDS template, if separate, and the financial statements. Also, the basis of preparation of information contained in interim reporting to investors should be consistent with annual reporting to investors. Any differences or exceptions should be explained.

Annual

Interim

RG06

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.

Annual

RG06-Debt Funds

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

Balance sheet;
Income statement;
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.

Annual

RG07

Abridged interim financial statements should be provided to investors. Managers and investors should agree on the format of the interim financial statements.

Interim

RG08

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

Interim

RG09

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.

Annual

RG10

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.

Interim

RG11

Disclose that the interim report should be read in conjunction with year-end investor report.

Interim

General vehicle information, organisation and governance

RG12

General information on the vehicle characteristics including, among others, name, domicile, legal form, vehicle style (by reference to INREV’s vehicle style definitions), description of vehicle structure, vehicle currency, vehicle year-end.

SDDS references:
1.1 Vehicle Name, 1.7 Vehicle Jurisdiction, 1.8 Legal Vehicle Structure, 1.9 Vehicle Structure, 1.12 Vehicle Reporting Currency, 1.6 Vehicle Financial Year-end

Annual

Interim

Describe material changes

RG13

Contact details of the vehicle.

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

Annual

Interim

Describe material changes

RG14

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

RG15

Identify and discuss vehicle governance and oversight frameworks such as the use of independent directors and investor or other special committees, and how they operate.

Annual

Interim

Describe material changes

RG16

Describe the level of adoption of INREV corporate governance best practices.

Annual

Interim

Describe material changes

RG17

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

RG18

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

RG19

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

RG20

Describe the investment stage of the vehicle in the context of key milestone dates, by sector/geography.

SDDS references:
Same as RG19

Annual

Interim

Describe material changes

Capital structure and vehicle-level returns

RG21

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

Annual

Interim

Describe material changes

RG22

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)

Annual

Interim

RG23

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

RG24

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

Annual

Interim

RG25

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

RG26

Summarise how the vehicle’s fee structure impacts the vehicle’s capital structure and vehicle-level returns, for instance describe any fee capitalisation arrangements.

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

Annual

Interim

Describe material changes

Manager's report

RG27

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.

Annual

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

Annual

RG28

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.

Annual

Interim

RG29

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

Annual

Interim

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

Annual

RG30

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

Annual

Interim

Describe material changes

RG31

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)

Annual

Interim

Disclose the NAV and material changes to methodologies and assumptions

RG32

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

Annual

RG33

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

Annual

Interim

RG34

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

Annual

RG35

Describe the impact of potential or implemented regulatory changes that affect or may affect the vehicle’s operations and performance.

Annual

ESG-LTS 1.2 Requirement – Vehicle Long Term Strategy

Detail the vehicle’s approach for ensuring compliance for current legislation relating to ESG issues is in place.

ESG-ANN 1.2 Requirement – Annual Objectives

Detail objectives for the next 12 month reporting period for ensuring compliance with current legislation in relation to ESG and about preparations for any future legislation that may be undertaken in this period.

ESG-POR 1.2 Requirement – Annual Portfolio Information

Report against compliance with current legislation requirements and objectives and associated targets for preparations for upcoming legislation.

Annual

RG36

Describe and comment on any significant one-off events having an impact on the results for the period. This disclosure should include, for instance, costs related to litigation, abort deal costs, one-off property related expenses and any other extraordinary or exceptional items.

Annual

Interim

Property report

RG37

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)

Annual

Interim

RG38

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)

Annual

Interim

RG39

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

SDDS references:
Portfolio allocation sheet

Interim

RG40

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)

Annual

RG41

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

Annual

Interim

Describe material changes

RG42

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

Annual

RG43

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

Annual

RG44

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.

Annual

Interim

Describe material changes

RG45

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.

Annual

Interim

Describe material changes

RG46

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)

Annual

Interim

Describe material changes

RG47

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

SDDS references:
9.3 NOI Yield

Annual

Interim

Describe material changes

RG48

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

Annual

Interim

Describe material changes

RG49

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

Annual

Interim

Describe material changes

RG50

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.

Annual

Interim

RG51

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.

Annual

Interim

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

Annual

RG52

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

Annual

Interim

RG53

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

Annual

Interim

RG54

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.

Annual

Interim

RG55

Summarise and comment on returns from non-property investments such as positions in other vehicles, listed securities and other assets.

Annual

Interim

Risk management

RG56

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.

Annual

Interim

Describe material changes

RG57

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.

Annual

Interim

Describe material changes

RG58

Describe the current level of compliance with risk management policies by reference to current exposures. In addition, comment on specific breaches and remedial plans.

Annual

Interim

Describe material changes

RG59

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.