Strong income and capital growth from real estate assets across Europe
25 April, Amsterdam – INREV’s pan-European annual Asset Level Index has recorded a total return of 10.23% in 2018. The new index reveals robust overall performance with capital growth of 5.74% and an income return of 4.27%.
This release of the index reflects data from 6,038 assets with a total combined AUM of €151.6 billion, covering around 20 countries and all key real estate sectors. The results point toward the underlying strength and resilience of the non-listed real estate investment industry in Europe.
The best national performance came from the Netherlands with a robust total return of 15.46%, much of which was driven by strong capital growth in the residential sector. Germany and France posted total returns of 12.18% and 9.55%, respectively. By contrast, the UK – which represented the largest percentage allocation of the whole index (28.3%) – demonstrated the weakest performance of the major European countries with a total return of 5.89% in 2018. Just 1.17% of the UK’s overall performance was attributed to capital growth.
In terms of sectors, residential delivered the most compelling results with a total return of 16.36%, closely followed by industrial / logistics at 15.51%. The office sector achieved a total return of 9.48%. Retail fared less well, with a total return of 4.15% and negative capital growth of -0.73%.
Originally requested, and eagerly anticipated, by the non-listed real estate industry as a whole, the new consultation index is based on five years of historical quarterly data. It delivers data sets of pure real estate performance, stripped of leverage and financial structuring. The index will provide investors and managers with a deeper understanding of the drivers of real estate performance and risk. It will greatly improve transparency and enhance decisions about portfolio allocation and risk management.
Commenting on the first annual Asset Level Index, Henri Vuong, INREV’s Director of Research and Market Information, said: ‘This is an impressive set of returns that will no doubt reinforce investors’ current positive view of non-listed real estate, which is based on an underlying asset class in good health that’s built on strong foundations.’
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Notes to Editors
About the Asset Level Index
The INREV Asset Level Index is a new annual and quarterly pan-European index measuring real estate asset level performance covering around 20 national markets and all key real estate sectors in Europe. The initial ‘consultation’ index is based on five years of historical quarterly data captured from 32 founding members – 29 asset managers and three institutional investors – all of whom are members of INREV.
The total index sample consists of 7,130 assets worth more than €160 billion. At the end of 2018 the sample comprised 6,038 assets with a total market value of €151.6 billion, on which the results of this index release are based.
Results are in local currency and the index is unfrozen, so historical data may change with future updates.
The INREV Asset Level Index is supported by a custom-made, automated validation system for contributors and a specific analysis tool to enhance data interpretation.
INREV, the European Association for Investors in Non-Listed Real Estate Vehicles, was launched in May 2003 as a forum for investors and other participants in the growing non-listed real estate vehicles sector. The association represents and reflects an industry with a total value of €2.7 trillion and INREV members deliver €385 billion of stimulus to the real economy of Europe.
INREV has 456 members which include 82 of the largest institutional investors as well as 40 of the 50 largest real estate fund managers, plus banks and advisors across Europe and elsewhere.
The non-profit association is focused on increasing the transparency and accessibility of non-listed vehicles, promoting professionalism and best practice, and sharing knowledge. It is based in Amsterdam, the Netherlands.
The Asset Level Index measures the performance of real estate assets across Europe on an annual basis.
The INREV Asset Level Index is a quarterly pan-European index measuring real estate market performance on an asset level across Europe.