Real estate investors achieved average annual growth of 8.75% over the decade to 2014, according to a new performance measure launched by INREV.
The European organisation for the non-listed rela estate fund industry analysed data from 19 investors across eight countries with combined total assets of €107.7 bn at the end of 2014.
The index found that real estate compared favourably with investment-grade bonds, which returned 4.9% per annum, and global equities, for which the figure was 6.2%.
The index takes account of all four main routes to real estate investment: listed, non-listed, direct and commercial real estate debt, and includes activity in all major sectors including retail, office, industrial and residential.
INREV expects the number of investors contributing data to increase significantly over time.
Henri Vuong, director of research and market information, said: 'This is a very exciting addition to the constantly expanding range of performance measurement tools we provide for the industry. The index will be of particular benefit in helping to inform global investors’ capital allocation decisions – both across multi-asset and real estate-specific investment strategies.'
INREV also has an asset-level performance index in the pipeline to enhance its suite of indices which include the INREV Annual Index, the INREV Quarterly Index and the Global Real Estate Funds Index (GREFI). The feasibility and due diligence process is expected to be completed in 2017.
'There is a clear message from the industry that an asset-level database of this type would be very useful,' said Vuong. 'It would be a valuable addition to INREV’s existing suite of performance measurement tools that help improve industry-wide best practice, transparency and peer-to-peer comparison.'
