A Clearer Lens on Investor Reporting

Easy access to regular valuation, financing and cash flow information on a vehicle in a standard structure has helped advance the professionalism of non-listed real estate. From its relatively opaque state barely ten years ago, the industry is beginning to get a clearer view of the structure of holdings and how their performance is evolving over time.

The INREV Standard Data Delivery Sheet (SDDS) is becoming increasingly important to the European non-listed real estate investment industry. Since its launch in 2012, many investors and managers have come to appreciate the worth of the SDDS as a useful tool for communicating key financial information on funds. Investors increasingly value receiving consistent financial reporting information in a standardised template, while managers have used the SDDS to streamline their reporting processes.

The SDDS has gone from strength to strength, and INREV have just released an updated version, known as Version 3.1.

This version brings with it a sleek new design and strengthened definitions that are now fully aligned with the latest INREV Guidelines on performance measurement and fee and expense metrics. The updated definitions also match the latest global reporting standards efforts, which INREV, NCREIF, PREA and ANREV are taking forward together.

Version 3.1 is set to take SDDS to the next level of usefulness and practicality. For one thing, a number of new data items have been added as a result of investor feedback, to reduce the number of ad-hoc information requests from investors that managers need to deal with. The latest version also has a new section that managers can use to submit vehicle level data for the INREV Quarterly Index rather than entering the data manually via the online data input tool.

‘The INREV reporting standards and in particular the SDDS have transformed the way investors access data on their investments and their ability to monitor performance and risk metrics. The SDDS is a great tool for gathering information on a like-for-like basis on a global scale. The more managers that can provide information in a standardised format to investors, the more it will benefit the industry. We have made SDDS a requirement for new investments for some time now.’
Dirk Bootsma, Senior Investment Manager PGGM

The more managers that can provide information in a standardised format to investors, the more it will benefit the industry

All the improvements INREV is making to the Standard Data Delivery Sheet have been phased in gradually, to minimise disruption for users. The original structure has largely been kept to make sure there is consistency between the different versions in key areas. Nevertheless, those who already use the SDDS should find Version 3.1 more streamlined and easier to use. The latest improvements are all documented in a change log, allowing users to easily modify their system interfaces for downloading the information.

INREV will also set up a service desk – made up of financial experts close to the SDDS project – to help resolve any queries that arise. And for those still considering whether to adopt the SDDS, we want to emphasise that using the template means that everyone involved with a vehicle’s investment performance can be – literally – on the same page. With one set of regular financial information that meets independent definitions and remains consistent over time, all stakeholders in a vehicle know what data they can expect to see and understand what it means.

‘A lot of effort has been put in updating the INREV SDDS and this new version will bring additional guidance, further standardisation as well as enhanced financial information aimed at increasing consistency across the reporting spectrum.’
Hugo Monster, Head of Investor Reporting EMEA, CBRE GIA

The consistency and comprehensiveness the SDDS brings is also important when comparing the performance of non-listed investments with other forms of real estate and with other asset classes altogether, and INREV plans to focus on this further in 2017.

The initial clamour for more information and insights about non-listed real estate investments may have come about as a reaction to the Global Financial Crisis. The real estate collapse that followed, when a number of investors got their fingers burnt, brought about a greater need for more transparency and with that, a strong desire for standardised reporting. Now, the majority of those involved in the sector, investors and managers alike, recognise the value of standardising reporting information as part of the essential infrastructure for a business. It doesn’t just matter when market conditions are difficult – it’s equally important that investors have the relevant data in an accessible format to make well-informed judgements when things are also going well.

Download the SDDS version 3.1 at www.inrev.org/sdds