ASSET LEVEL INDEX Further improving transparency of the non-listed - - PowerPoint PPT Presentation

Vitaliy Tonenchuk Senior Research and Analytics Manager INREV April 2019 Further improving transparency of the non-listed real estate industry

ASSET LEVEL INDEX

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

4

Summer

Deka 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

Autumn

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

Spring

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

H2

INREV, together with the focus group and performance measurement committee embarked on a proof of concept for the Asset Level Index

Summer

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

Autumn

Signed commitments exceeded targets with 32 companies signing

Spring

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

2015 2016 2017 2018 2019

2018-2019

Historical data collection and development of IT infrastructure

April 2019

Launch during INREV Annual Conference with more than 7000 assets worth more than EUR 150 bn

The journey began in 2015…

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

Members actively worked in focus groups

6

Focus Groups

Data fields and definitions Data delivery template Performance calculation methodology Validation, quality control and processes Visualisation, design and reporting Asset to fund level reconciliation Technology Governance

INREV members and NCREIF contributed their knowledge, expertise and provide governance for the project

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

9

Founding members commitment Potential Founding members potential Founding members global potential

€ billion

10

150 180 200 220 240 260 40 60 80 100 120 7,130 11,000 13,000 15,000 17,000 19,000

5,000 10,000 15,000 20,000 50 100 150 200 250 300 350 400 450 2018 2019 2020 2021 2022 2023 Number of assets Market value, billion €

Value of assets founding members Value of assets new participants Number of assets

Exceed the size of the fund level index by 2020

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

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

Data-driven investment decisions

Risk Management Framework

Asset allocation Portfolio construction Investment strategy Portfolio monitoring

Performance measurement 14

What you get

15 Note: data is not yet approved by INREV

Market analysis tool Portfolio analysis tool Portfolio vs Market comparison tool Data Input tool Asset level performance Quarterly report

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…

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 % return

Income return* Capital growth* Total return*

…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% 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 % return

Income return* Capital growth* Total return*

Evenly spread across Europe

22 Note: data is not yet audited/approved by INREV 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3

Index composition by country

Germany Netherlands France United Kingdom Switzerland Spain Poland Italy Portugal Sweden Belgium Others

… and sectors

23 Note: data is not yet audited/approved by INREV 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3

Index composition by sector

Office Industrial / logistics Retail Residential Health care Mixed Parking Hotel Other real estate type Student housing Leisure Aged care Agricultural

Country and city level performance

0% 5% 10% 15% 20% 25% 2014 2015 2016 2017 2018 %, total return

Netherlands

Netherlands Amsterdam Rotterdam

0% 5% 10% 15% 20% 25% 2014 2015 2016 2017 2018 %, total return

Germany

Germany Frankfurt Berlin

24 * In local currency 0% 5% 10% 15% 20% 25% 2014 2015 2016 2017 2018 %, total return

United Kingdom

UK London Birmingham

Sector comparison

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 2014 2015 2016 2017 2018 %, total return

Offices Retail Residential Industrial/Logistics Other sectors

25 * In local currency

Portfolio analysis tool

26 Note: data is not yet audited/approved by INREV

Comprehensive analytical tools and reports

27

Detailed statistics for each selection

28

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?

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

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

Join the club

Here to help

37