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Asset Level Index

The Asset Level Index initiative delivers on INREV’s mission to further transparency of the non-listed industry by developing global market information to support peer-to-peer comparison.

How to join

Are you interested along with 32 founding members to join the asset level index, ensuring its future success and growing its reach on a global scale? 

Are you a Fund manager or data contributing investor? Are you a non data contributing investor?
You’ll have full access to: You’ll have full access to:
Your contribution:
  • An annual fee of €7,500 (starting only after 12 months - no fee during the first year of becoming a member)
  • Historical data starting from Q4 2013
Your contribution:
  • An annual fee of €15,000
  • Motivate managers to join this initiative and deliver their data

All fund manager/data contributing investor members who join this project will benefit from a fee-free first year, after which the annual fee as described above will be charged. This benefit is applicable only to managers who provide historical data for all assets held within the funds that are included in the INREV Fund Index. Data contributing investors should provide data for their direct portfolios and ask their managers to provide assets that they have invested in. 

At this moment only investors, investment managers and fund of funds managers can join this project.

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Background

The Asset Level Index was initiated in 2015 in response to the evolving needs of the market, enabling deeper insights into drivers of vehicle performance, market index comparison and truly customised analysis. 

Supported by 31 founding INREV members, the index represents a common goal to further increase transparency across the industry and develop global market information to support peer-to-peer market comparison and analysis. 

The journey began in 2015

Summer 2015

Deka and DWS, members of both INREV and BVI approached INREV to discuss requirements for a comprehensive set of indices to measure the performance of real estate assets

Autumn 2015

The initiative rapidly gained traction and a focus group of c. 30 members across Europe and NCREIF was formed

Spring 2016

At the INREV Annual Conference 2016 INREV announced that it would commence on a proof of concept to test the concept and viability of developing an asset level performance index

Spring 2017

At the INREV Annual Conference 2017 INREV gave a presentation and made a call for signed commitments to the project

Summer 2017

A prototype-led selection process was carried out to choose an IT company to develop the system for the Asset Level Index

Autumn 2017

Signed commitments exceeded targets with 31 companies signing representing committed assets of +EUR 160 billion

March 2018

Data collection and validation began

April 2018

Live demo of the data input tool at the Annual Conference

June 2018

Launch of data input tool and live workshops in London, Amsterdam and Frankfurt

June - December 2018

Development of the online analysis tool

 
 
 



The project scope is defined as:

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


The project deliverables are defined as:

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

Asset Level Index

Comprehensive measures of performance of real estate assets accross Europe

Get deeper insights into drivers of your vehicle performance
Compare your performance against a market index
Formulate a strategy and compare it to a market index
Create your customised indices with the online analysis tool



The index is on course to be a huge success, with founding members already having pledged €162 billion in assets,  exceeding a €100 billion target. Ambitions to grow the index globally are strong and thanks to collaborative efforts with regional partners ANREV and NCREIF, the feasibility to further the span of the index is well within reach. 
 

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Progress and potential

Founding members have committed to provide more than 7000 assets worth €162 billion. As of April 1 2019, INREV has collected more than 7000 assets with the total value of €150 billion.

The potential to expand coverage is huge if and when existing members provide further assets and new INREV members join.

INREV expects to reach coverage of more than €250 billion in 2021, matching the size of its fund level index.

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Asset-Level-2.jpg

 

Governance

An Asset Level Index focus group, consisting of INREV members was formed to work closely with the project to carry out due diligence, evaluate the feasibility and work on a proof of concept alongside the INREV Performance Measurement Committee.

Around 30 individual members representing 18 different companies including NCREIF CEO, have been working on the proof of concept, evaluating key items such as data fields and definitions, calculation and methodology, validation and visualisation and the analysis and use of data. 

This process is a similar procedure implemented in the development of INREV’s existing indices.

asset level governance

How often does the focus group meet?
Calls take place on a regular 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 and then split into sub working groups to tackle different technical aspects of the project. Each working group is then assigned a working group chair and each group has specific objectives to tackle.

How are decisions made?
The INREV Management Board are updated on a quarterly basis and provide approval for each major step in the project following a three-layer approval process:

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


 

Calculation methodology

A Calculation methodology has been developed in cooperation with the asset level performance calculation sub-group that consisted of the representative of the following companies: Allianz, Invesco, Rockspring, M&G, LaSalle, TH Real Estate and CBRE.

The final methodology was approved by the overall Asset Level Index focus group and the INREV Asset Level indices must include the following assets:

  • Located in Europe
  • All asset types and sub-types
  • All life-cycle stages
  • All types of valuation approaches
  • All accounting standards
  • INREV only accepts information which comes directly from the fund manager or investor and not from public sources.

Frequency of data delivery
Asset level data can be delivered on monthly, quarterly, semi-annual and annual basis. The template that has been developed together with the focus group allows INREV members provide data in any frequency that they use internally to report their financial results.

Monthly chain-linking
To calculate quarterly or annual performance monthly chain-linking methodology will be used. A detailed asset level index calculation guide will be published on this page at the beginning of 2019.

Total return formula

$$ TR_{m_k} = {MV_{k_m} - MV_{k_m-1} + ΣD_{k_m} - ΣA_{k_m} - CAPEX_{k_m} + NOI_{k_m} \over MV_{k_{_m-1}} + ΣA_{k_m} + CAPEX_{k_m} } $$

$$ TR_{Q} = (1+TR_{m_1}) * (1+TR_{m_2}) * (1+TR_{m_3}) -1 $$

$$ TR^P = Σ(N^{a^1},N^{a^2},N^{a^3},...) \over Σ(D^{a^1},D^{a^2},D^{a^3},...) $$

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Data collection, validation and quality

Online Data Input Tool

Which data fields does INREV collect?
Data is collected using an excel file that contains data fields that have been agreed on with the focus group.
Download data delivery template below

How is data collected?
Data is collected via an online data input tool, where members are able able to upload the Excel data delivery template.  The system runs a number of validations to ensure the quality of the data received.  Members are asked to approve data before submission to INREV.

Asset Level Index DashboardData upload process

Asset Level Index

How is data validation carried out?
The validation process includes 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 is 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.  

Which 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.

Which performance is measured for individual assets?
Monthly, quarterly and annual performance will be measured net of costs.

What type of returns will performance measure on an index level?
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.

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Asset Level Index Input Tool

The Asset Level Index is now ready for data collection. Provide your data using the Asset Data Input Tool.

Asset Data Input Tool

Asset level toolasset level detailed stats

 

FAQ's

What was the initial driver of this initiative?

In the summer of 2015, Deka and Deutsche Bank, both members of both INREV and the BVI (German Investment Funds Association), approached INREV to discuss their requirements for a comprehensive set of indices to measure the performance of real estate assets across the world.

This requirement was driven by regulations on risk metrics disclosures, which must be based on robust indices representing the performance of global real estate asset markets.

Why did INREV decide to explore this initiative?

There was strong appetite from, and a need within the membership, for information that will allow the industry to better understand the drivers of fund performance.  This initiative will help the industry strive towards better transparency. Together with ANREV and NCREIF, this initiative will allow INREV to move towards the provision of a robust and highly dependable global index.

How is this initiative in-line with INREV’s mission statement and strategic goals?

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.

Why has INREV been selected for this project?

INREV was approached by its members due to its experience in index construction and production, as well as its independence and not-for-profit status and close working relationships with NCREIF and ANREV. 

Is this information missing from the market?

There are many countries across Europe that do not have a robust index and that European indices are dominated by the countries like Germany, Italy, The Netherlands, UK and France. This index will provide greater granularity and a greater analysis of more European countries.

Why will this service be different to anything that is currently available on the market?

INREV promotes a self-service model whereby members can log in anytime anywhere to access information instantly.  Members will be able to make their own customised selections, thereby cutting out lag time in waiting for a response from service teams.

Through the INREV Fund Index INREV already has fund level performance data of more than 300 funds. This presents an opportunity to potentially expand coverage and provide members access to a large European asset level database covering more than just major European real estate markets.

Contact

If you want to join this project but need more information, please contact Vitaliy Tonenchuk.

We can also organise a webinar during which we can demonstrate all tools and answer all your questions in detail. 

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Questions about the Asset Level Index?

Please don't hesitate to contact us.