STUDENT HOUSING: INREV seeks fund backing for new index

A lack of performance data is one of the main impediments to attracting institutional investment into a niche real estate sector. INREV is seeking to help address this situation for student housing by calling fund managers to support a new index for the burgeoning sector.

A lack of market data is one of the main impediments to attracting institutional investment into a niche real estate sector. INREV is seeking to help address this situation for student housing by calling fund managers to support a new index for the burgeoning sector.

Call for data
The tools are already in place and all that is needed is for funds active in student accommodation to commit to provide data on their performance, according to Henri Vuong, director of research and market information at INREV, the European Association for Investors in Non-Listed Real Estate.

The first student housing index could be presented along with INREV's Q4 results presentation in February 2016, Vuong said.

The INREV index of funds investing in European real estate is broken down by style, country, structure, single sector and multi sector. Student accommodation would come under the single sector component alongside office, retail, industrial/logistics and residential.

INREV currently has some 376 members. Over 80% of the 50 largest fund managers are members, with a real estate AUM of more than €1.1 tln.

The INREV tool presents the data for analysis purposes without linking the performance information to individual contributors, Vuong told a special workshop at the Class of 2020 student accommodation conference in Amsterdam on 4 November.

Vuong said that INREV is keen to talk to managers of student housing funds to explain the data requirements, to understand the gaps that need to be addressed and to agree a data collection process. Funds do not have to be members of INREV to supply data and access the INREV analysis tool.

Index criteria
INREV data analyst Alfio Shkreta outlined to the workshop the main criteria for inclusion in all INREV indices. Only funds with three or more investors qualify, and therefore separate accounts, joint ventures and club deals are not included.

The emphasis is on the institutional end of the market, so funds need to comprise at least 50% institutional, rather than private investor holdings. The funds included in the student accommodation index also have to be 90% invested in Europe, and core and value added funds are eligible. Opportunity funds will be added 'in the near future', Shkreta said.

Shkreta estimated that the student accommodation universe in Europe currently comprises about 15 funds. 'If the index can capture the performance of 10 of these funds this would be a very good start,' he said. 'A few players in the US have launched or are launching European-focused student funds and these would likely be eligible too to take part in the index,' Shkreta said.