ASSET LEVEL INDEX Further improving transparency of the non-listed real estate industry INREV Vitaliy Tonenchuk April 2019 Senior Research and Analytics Manager
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
HOW IT STARTED Request from the membership to improve transparency and accesibility of data
The journey began in 2015… 2015 2016 2017 2018 2019 Summer Spring Spring Autumn April 2019 Deka and Deutsche Asset At the INREV Annual At the INREV Annual Signed commitments Launch during Management, members of Conference 2016 INREV Conference 2017 exceeded targets INREV Annual both INREV and BVI announced that it would INREV gave a with 32 companies Conference with approached INREV to commence on a proof of presentation and made signing more than 7000 discuss requirements for a concept to test the a call for signed assets worth more comprehensive set of concept and viability of commitments to the than EUR 150 bn indices to measure the developing an asset level project performance of real estate performance index assets Autumn H2 Summer 2018-2019 The initiative rapidly A prototype-led INREV, together with the Historical data gained traction and a focus group and selection process was collection and focus group of c. 30 performance carried out to choose development of IT members across measurement committee an IT company to infrastructure Europe and NCREIF develop the system for embarked on a proof of was formed the Asset Level Index concept for the Asset Level Index 4
Why INREV? 15 years experience with Collaboration and support Non-profit and member data collection and index from NCREIF and ANREV to driven initiative production expand globally Adopts the technology for Newest data integrity and 32 leading fund managers data collection and security technology / and investors already portfolio and market measures implemented support analysis 5
Members actively worked in focus groups Data fields and definitions Data delivery Governance template Performance Focus Technology calculation Groups methodology Validation, Asset to fund quality level control and reconciliation processes Visualisation, design and reporting INREV members and NCREIF contributed their knowledge, expertise and provide governance for the project 6
Backed by 29 leading global managers and 3 investors 7 7
HOW BIG THE INDEX WILL BE Substantial coverage from day one
Critical mass committed and collected Founding members commitment Founding members potential Potential Founding members global potential € billion 9
Exceed the size of the fund level index by 2020 450 20,000 19,000 400 17,000 350 15,000 15,000 120 300 13,000 100 Market value, billion € Number of assets 80 11,000 250 60 10,000 40 200 7,130 150 5,000 100 50 150 180 200 220 240 260 0 0 2018 2019 2020 2021 2022 2023 Value of assets founding members Value of assets new participants Number of assets 10
Launching with pan-European coverage 11 * As at December 2018
HOW YOU CAN USE THE ASSET LEVEL INDEX Asset performance and market comparison
Main goals Asset Level Index ____ Comprehensive measures of performance of real estate assets across Europe Create your own Formulate strategy and Get deeper insights into customised indices with compare it to a market drivers of your vehicle the online analysis tool index performance and compare Improve industry transparency and data accessibility 13
Data-driven investment decisions Asset allocation Portfolio Performance measurement construction Risk Management Framework Portfolio Investment monitoring strategy 14
What you get Portfolio vs Market comparison Market analysis tool Portfolio analysis tool tool Data Input tool Asset level performance Quarterly report Note: data is not yet approved by INREV 15
Portfolio and asset level analysis 16
Portfolio analysis and market comparison 17
Asset level performance reporting 18
WHERE WE ARE NOW Launch at 2019 Annual Conference
Five years of annual… 12% 11.1% 10.8% 10.2% 10.0% 10% 8% 7.0% % return 6% 4% 2% 0% 2014 2015 2016 2017 2018 Income return* Capital growth* Total return* 20 * In local currency
…and quarterly data from launch 15% 13% 10.8%11.3%11.4% 10.7%11.1% 10.7%11.0% 11% 10.1% 9.8%10.0% 10.0% 8.8% 7.9% 8.4% 9% 7.3% 6.9% % return 7% 5% 3% 1% 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 -1% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Income return* Capital growth* Total return* * In local currency, quarterly annualised 21
Evenly spread across Europe Index composition by country 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Germany Netherlands France United Kingdom Switzerland Spain Poland Italy Portugal Sweden Belgium Others Note: data is not yet audited/approved by INREV 22
… and sectors Index composition by sector 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Office Industrial / logistics Retail Residential Health care Mixed Parking Hotel Other real estate type Student housing Leisure Aged care Agricultural Note: data is not yet audited/approved by INREV 23
Country and city level performance United Kingdom Germany Netherlands 25% 25% 25% 20% 20% 20% %, total return %, total return %, total return 15% 15% 15% 10% 10% 10% 5% 5% 5% 0% 0% 0% 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Netherlands UK London Germany Frankfurt Amsterdam Rotterdam Birmingham Berlin * In local currency 24
Sector comparison 20% 18% 16% 14% 12% %, total return 10% 8% 6% 4% 2% 0% 2014 2015 2016 2017 2018 Offices Retail Residential Industrial/Logistics Other sectors * In local currency 25
Portfolio analysis tool Note: data is not yet audited/approved by INREV 26
Comprehensive analytical tools and reports 27
Detailed statistics for each selection 28
What’s next? 2020 2021 2019 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 29
HOW TO PROVIDE DATA Launch at 2019 Annual Conference
Data input tool launched in June 31
Simple validation and sign off process 32
Asset performance analysis 33
WHAT WE ASK FOR Join this industry initiative
Join now for 100% discount on year 1 fee First year – 100% discount to data contributing investors and managers Historical data 3 years of EUR 7,500 starting from data going annual fee* Q4 2013 forwards Non-data contributing investors pay an annual fee of EUR 15.000 *applies to data contributing managers and investors 35
Join the club
Here to help 37
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