FRANCE - French business school EDHEC has launched a monthly index for commercial property in France with the help of the Institut de l'Epargne Immobilière et Foncière (IEIF), an independent French real estate research institute.
The EDHEC IEIF Commercial Property Index (France) will measure the performance of shares traded in a collective portfolio of unlisted property funds under the French SCPI (Société Civile de Placement Immobilier) scheme. These invest in commercial property, comprising some 3400 individual assets with a total value of €7.5bn.
Guy Marty, director at IEIF, said: "In an uncertain environment in which the markets are playing a waiting game, transparency and liquidity are more than ever decisive challenges both for investors and for the entire economy."
Only funds with a minimum transaction volume of €2.0m a year are included in the index.
Every SCPI is required to publish details about its property portfolio once per year, including information about all properties and their corresponding appraisal values.
According to Dr. Felix Goltz, head of applied research at EDHEC, this makes the EDHEC IEIF Commercial Property Index (France) more transparent than the IPD index: "Given this obligation of the SCPI scheme, the index is transparent down to the single property level. In contrast to this, the constituents of the IPD index are not public knowledge."
"Due to the transaction volume condition, the EDHEC IEIF Commercial Property (France) Index can be considered to be directly investible while the IPD index is only investible through derivatives contracts," he added.
The base date is 31 December 1980 and the index is calculated on a net and gross basis, measuring the change in the prices of components and the performance with dividends reinvested respectively.
An index committee made up of real estate and financial analysts, property managers, academics and representatives of EDHEC and IEIF reviews the organisation of the index at the end of every semester.
The UFG Group, the global competitiveness institution, and Finance Innovation both contributed to the launch.
The EDHEC Risk and Asset Management Research Centre, part of the French and European business school EDHEC, is made up of 46 professors, engineers and research associates.
IEIF aims to provide information, analyses and forecasts on the real estate markets and investments in France and Europe.
