The growing number of value-added and opportunistic investment-style institutional non-listed real estate funds launched in Europe combined with the influence of these two styles has resulted in the industry increasing its out-performance relative to the underlying direct property market, the latest INREV Quarterly Research Report shows.
In the last five years, the INREV Institutional Vehicles Index has produced an average five year annual return in Euro of 13.9% compared to 9.0% for the Investment Property Databank's (IPD) pan-European Index, which tracks the market's performance at the direct property level.
"The increasing number of higher-risk strategy value added and opportunity funds that have joined the INREV Index in the last few years reflects the underlying trend in the European non-listed real estate funds market and means their influence on industry-wide performance is growing," INREV analyst Casper Hesp concluded.
The INREV Index, which is derived from the database and tracks investment performance, now covers a total of 206 funds with a total (net of leverage) asset value of €153 billion, of which institutional vehicles make up 84% by number and 54% by value.
The article also reports for the first time the results of sub-indices calculated from the INREV Institutional Vehicles Index by style, sector, single country vs multi-country and by NAV. These results show the performance without the influence of retail investor funds which are included in the main Index.
In addition, this quarter also a represents a new landmark for the INREV Vehicles Database. "The database has now passed a milestone with over 500 funds included with a gross asset value of €347.4 billion. This is allowing us to more accurately track trends in the industry and identify important developments such as the increasing proportion of funds with higher risk profiles as detailed in our Quarterly Research Report," INREV Chief Executive Lisette van Doorn said.
INREV members can access the full report on the INREV website.