INREV, the European association for the non-listed real estate sector, is extending its focus to the global stage following the appointments of Henri Vuong as director of research and market information and Maurits Cammeraat as director of professional standards.

INREV, the European association for the non-listed real estate sector, is extending its focus to the global stage following the appointments of Henri Vuong as director of research and market information and Maurits Cammeraat as director of professional standards.

‘Global capital flows shows no boundaries and we’re now seeing an increasing amount of money coming in and out of Europe,’ Vuong told PropertyEU in an interview. ‘We are now preparing our annual Investment Intentions Survey together with ANREV and PREA, which will be a global study for the second year running. That survey is one of the leading indicators of where capital is intending to go. We are planning to do the same with our capital raising study and are turning that into a global study as well, along with others.’

The globalisation of INREV’s key annual surveys follows the launch of its global fund index earlier this year together with ANREV and NCREIF . Improvements are ongoing Vuong said: ‘We aim to increase the sample size in the coming years. A key focus is consistency and transparency across the regions, to support market participants in assessing real estate on a more level playing field.’

Other priorities include the expansion of the INREV database, Vuong said. ‘Real estate vehicles have evolved over the years and that should be reflected in our database. We will be revisiting the size of the investment universe, the number of investors and fund managers, and how they have changed over the years.’

RUBIK'S CUBE
Vuong draws a comparison with a Rubik’s cube. ‘We need to better understand all the facets of the non-listed real estate sector. We aim to conduct more forward-looking research and will be increasing focus on the bigger picture themes.’ She cites macro-economic issues such as the impact of recent banking reforms, its knock-on effect on debt liquidity and the rise of debt funds being one. ‘We’re looking at the waterfall effect of bigger picture themes onto the real estate sector. Are debt funds here to stay and will they become an established alternative source of debt? If so, that could mean there would be more diversified sources of debt available for real estate, potentially limiting the impact of systemic risk in the next downturn.’

Another key topic is the price elasticity of real estate, she added. ‘Bond rates are low and interest rates are incredibly low right now. What does this mean for the relative value of real estate when these start to rise? When and how quickly will we see an erosion in the attractiveness of real estate when bond rates and interest rates start rising? Overall, we aim to better understand the evolution of real estate as an asset class. If we can help market participants understand these changes, we can also help them make better informed decisions.’

Vuong’s previous real estate experience spans both equity and debt. Before joining INREV in August 2014, she worked with the Real Estate Finance Strategy & Research team at the Royal Bank of Scotland in London, where she was responsible for formulating Commercial Real Estate (CRE) business appetite strategies and providing client insight for the Commercial & Private banking division. Prior to RBS, she worked as a senior property research analyst with a focus on quantitative risk at M&G Real Estate (formerly Prupim), as well as acting deputy to the director of property derivatives.

Vuong also comes to the role with a strong understanding of the benefits of industry research programmes. She was the 2012 chairperson of the UK Society of property researchers and continues to serve on the committee. She also sits on Property Industry Alliance research group, and is a board director of the Association of Property Lenders, consultant to the Chinese Property Professionals Society, an assessor for the RICS Research Trust and a member of the Investment Property Forum.

GLOBAL REMIT
Vuong’s newly appointed colleague Maurits Cammeraat likewise has a global remit in his new position. ‘One of my key priorities is to make the INREV Guidelines more global and extend them from Asia - where the Guidelines have already been licensed to ANREV - to the US. We have connections with the associations there, ANREV in Asia and NCREIF and PREA in the US.’

According to INREV’s annual Review of Reporting Best Practice, the overall average compliance with the Guidelines remains high. The INREV Guidelines have already been adopted in Asia and have even been translated into Japanese, Cammeraat pointed out. ‘The INREV Guidelines are really powerful, we have already reached a level of 75% penetration in the European market, but we now want to make that 100%.’

Cammeraat is keen to step up corporate governance standards within INREV and aims to establish global groups in that context with ANREV and NCREIF and PREA. Greater standardisation is desirable with regard to how companies should act as a fund manager or investor and how fund managers should present their reporting to investors, he noted. ‘We have a lot of experts and committees within INREV who can provide expertise on how to value a property, create liquidity and how to unwind specific funds. By complying with these guidelines, fund managers can make it easier for companies to invest. AIFMD is specific to the EU market, but there are also areas where we can learn from each other, for example with regard to the way that reporting should be done. The US have has also done a lot of work on performance benchmarking.’

WAVE OF REGULATION
Since the outbreak of the global financial crisis, the real estate sector has been hit by a wave of regulation, Cammeraat pointed out. ‘It’s a really interesting time but it’s also difficult for some fund managers to keep track of all the changes. There’s a level of complexity that needs to be addressed. For example, with regard to outsourcing and insourcing. Some organisations are outsourcing their accounting services, but this can create an obstacle from an investor perspective as investors have a growing need for even faster reporting. There is a contradiction in this, but standardisation can be part of the solution.’

Not only do the INREV Guidelines bring together the best practices, they also provide a means for realising greater cost efficiency, he added. ‘By using the guidelines, fund managers can lower the risks and increase transparency.’

Bringing together best practices is also a goal with regard to sustainability, Cammeraat said. A dedicated committee focusing on the topic is due to present its findings and conclusions at the annual INREV conference in April, he added. ‘The challenge facing us now is how to get more insight about the link between financial performance and investments in green buildings and the correlation between financial performance and corporate social responsibility within the industry. What are the best practices in the market, also in terms of reporting. The committee aims to provide an overview of the best practices and present recommendations in terms of collecting key performance indicators (KPIs) to ensure the best performance.’