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TRANSCRIPT
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Vitaliy Tonenchuk
Senior Research and Analytics Manager
INREV
April 2019
Further improving transparency of the non-listed real estate industry
ASSET LEVEL INDEX
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Contents
• How it started
• How big the index will be
• How you can use the Asset Level Index
• Where we are now
• What we are asking for
• How to provide data
• How to join
2
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HOW IT STARTED
Request from the membership to improve transparency and accesibility of data
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4
SummerDeka and Deutsche Asset
Management, 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
AutumnThe initiative rapidly
gained traction and a
focus group of c. 30
members across
Europe and NCREIF
was formed
SpringAt 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
H2INREV, together with the
focus group and
performance
measurement committee
embarked on a proof of
concept for the Asset
Level Index
SummerA prototype-led
selection process was
carried out to choose
an IT company to
develop the system for
the Asset Level Index
AutumnSigned commitments
exceeded targets
with 32 companies
signing
SpringAt the INREV Annual
Conference 2017
INREV gave a
presentation and made
a call for signed
commitments to the
project
2015 2016 2017 2018 2019
2018-2019Historical data
collection and
development of IT
infrastructure
April 2019Launch during
INREV Annual
Conference with
more than 7000
assets worth more
than EUR 150 bn
The journey began in 2015…
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Why INREV?
Non-profit and member driven initiative
15 years experience with data collection and index
production
Collaboration and support from NCREIF and ANREV to
expand globally
Adopts the technology for data collection and
portfolio and market analysis
Newest data integrity and security technology /
measures implemented
32 leading fund managers and investors already
support
5
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Members actively worked in focus groups
6
Focus Groups
Data fields and
definitions
Data delivery template
Performance calculation
methodology
Validation, quality
control and processesVisualisation,
design and reporting
Asset to fund level
reconciliation
Technology
Governance
INREV members and NCREIF contributed their knowledge, expertise and provide
governance for the project
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Backed by 29 leading global managers and 3 investors
7 7
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HOW BIG THE INDEX WILL BE
Substantial coverage from day one
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Critical mass committed and collected
9
Founding
members
commitment
Potential
Founding
members
potential
Founding
members global
potential
€ billion
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10
150 180 200 220 240 260
40
60
80
100
120
7,130
11,000
13,000
15,000
17,000
19,000
0
5,000
10,000
15,000
20,000
0
50
100
150
200
250
300
350
400
450
2018 2019 2020 2021 2022 2023
Nu
mb
er
of a
ssets
Mark
et valu
e,
bill
ion €
Value of assets founding members Value of assets new participants
Number of assets
Exceed the size of the fund level index by 2020
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Launching with pan-European coverage
11
* As at December 2018
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HOW YOU CAN USE THE ASSET LEVEL INDEX
Asset performance and market comparison
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Main goals
13
Asset Level Index
____
Comprehensive measures of performance of real estate assets across Europe
Get deeper insights into
drivers of your vehicle
performance
Create your own
customised indices with
the online analysis tool
and compare
Formulate strategy and
compare it to a market
index
Improve industry transparency and data accessibility
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Data-driven investment decisions
Risk Management Framework
Asset allocation
Portfolio construction
Investment strategy
Portfolio monitoring
Performance measurement
14
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What you get
15Note: data is not yet approved by INREV
Market analysis tool Portfolio analysis toolPortfolio vs Market comparison
tool
Data Input tool Asset level performance Quarterly report
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Portfolio and asset level analysis
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Portfolio analysis and market comparison
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Asset level performance reporting
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WHERE WE ARE NOW
Launch at 2019 Annual Conference
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Five years of annual…
20* In local currency
10.8%11.1%
7.0%
10.0% 10.2%
0%
2%
4%
6%
8%
10%
12%
2014 2015 2016 2017 2018
% r
etu
rn
Income return* Capital growth* Total return*
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…and quarterly data from launch
21* In local currency, quarterly annualised
10.8%11.3%11.4%
10.7%11.1%
10.1%
8.8%
7.3%6.9%
7.9%8.4%
9.8%10.0%10.0%10.7%11.0%
-1%
1%
3%
5%
7%
9%
11%
13%
15%
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
2016Q2
2016Q3
2016Q4
2017Q1
2017Q2
2017Q3
2017Q4
2018Q1
2018Q2
2018Q3
2018Q4
% r
etu
rn
Income return* Capital growth* Total return*
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Evenly spread across Europe
22Note: data is not yet audited/approved by INREV
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
2016Q2
2016Q3
2016Q4
2017Q1
2017Q2
2017Q3
2017Q4
2018Q1
2018Q2
2018Q3
Index composition by country
Germany Netherlands France United Kingdom Switzerland Spain
Poland Italy Portugal Sweden Belgium Others
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… and sectors
23Note: data is not yet audited/approved by INREV
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
2016Q2
2016Q3
2016Q4
2017Q1
2017Q2
2017Q3
2017Q4
2018Q1
2018Q2
2018Q3
Index composition by sector
Office Industrial / logistics Retail Residential Health care
Mixed Parking Hotel Other real estate type Student housing
Leisure Aged care Agricultural
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Country and city level performance
0%
5%
10%
15%
20%
25%
2014 2015 2016 2017 2018
%, to
tal re
turn
Netherlands
Netherlands
Amsterdam
Rotterdam
0%
5%
10%
15%
20%
25%
2014 2015 2016 2017 2018
%, to
tal re
turn
Germany
Germany Frankfurt
Berlin
24* In local currency
0%
5%
10%
15%
20%
25%
2014 2015 2016 2017 2018
%, to
tal re
turn
United Kingdom
UK London
Birmingham
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Sector comparison
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2014 2015 2016 2017 2018
%, to
tal re
turn
Offices Retail Residential Industrial/Logistics Other sectors
25* In local currency
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Portfolio analysis tool
26Note: data is not yet audited/approved by INREV
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Comprehensive analytical tools and reports
27
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Detailed statistics for each selection
28
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29
Further promotion to get new participants
Expand coverage to make this index even more relevant and valuable
Investor and fund manager data sharing
Attribution and reconciliation analysis tool
Global Asset Level Index
2019 2020 2021
What’s next?
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HOW TO PROVIDE DATA
Launch at 2019 Annual Conference
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Data input tool launched in June
31
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Simple validation and sign off process
32
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Asset performance analysis
33
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WHAT WE ASK FOR
Join this industry initiative
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Join now for 100% discount on year 1 fee
35*applies to data contributing managers and investors
EUR 7,500 annual fee*
Historical data starting from
Q4 2013
3 years of data going forwards
Non-data contributing investors pay an annual fee of EUR 15.000
First year – 100% discount to data contributing investors and managers
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Join the club
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Here to help
37