Vitaliy Tonenchuk

Senior Research and Analytics Manager

INREV

April 2019

Further improving transparency of the non-listed real estate industry

ASSET LEVEL INDEX

Contents

• How it started

• How big the index will be

• How you can use the Asset Level Index

• Where we are now

• What we are asking for

• How to provide data

• How to join

2

HOW IT STARTED

Request from the membership to improve transparency and accesibility of data

4

SummerDeka and Deutsche Asset

Management, members of

both INREV and BVI

approached INREV to

discuss requirements for a

comprehensive set of

indices to measure the

performance of real estate

assets

AutumnThe initiative rapidly

gained traction and a

focus group of c. 30

members across

Europe and NCREIF

was formed

SpringAt the INREV Annual

Conference 2016 INREV

announced that it would

commence on a proof of

concept to test the

concept and viability of

developing an asset level

performance index

H2INREV, together with the

focus group and

performance

measurement committee

embarked on a proof of

concept for the Asset

Level Index

SummerA prototype-led

selection process was

carried out to choose

an IT company to

develop the system for

the Asset Level Index

AutumnSigned commitments

exceeded targets

with 32 companies

signing

SpringAt the INREV Annual

Conference 2017

INREV gave a

presentation and made

a call for signed

commitments to the

project

2015 2016 2017 2018 2019

2018-2019Historical data

collection and

development of IT

infrastructure

April 2019Launch during

INREV Annual

Conference with

more than 7000

assets worth more

than EUR 150 bn

The journey began in 2015…

Why INREV?

Non-profit and member driven initiative

15 years experience with data collection and index

production

Collaboration and support from NCREIF and ANREV to

expand globally

Adopts the technology for data collection and

portfolio and market analysis

Newest data integrity and security technology /

measures implemented

32 leading fund managers and investors already

support

5

Members actively worked in focus groups

6

Focus Groups

Data fields and

definitions

Data delivery template

Performance calculation

methodology

Validation, quality

control and processesVisualisation,

design and reporting

Asset to fund level

reconciliation

Technology

Governance

INREV members and NCREIF contributed their knowledge, expertise and provide

governance for the project

Backed by 29 leading global managers and 3 investors

7 7

HOW BIG THE INDEX WILL BE

Substantial coverage from day one

Critical mass committed and collected

9

Founding

members

commitment

Potential

Founding

members

potential

Founding

members global

potential

€ billion

10

150 180 200 220 240 260

40

60

80

100

120

7,130

11,000

13,000

15,000

17,000

19,000

0

5,000

10,000

15,000

20,000

0

50

100

150

200

250

300

350

400

450

2018 2019 2020 2021 2022 2023

Nu

mb

er

of a

ssets

Mark

et valu

e,

bill

ion €

Value of assets founding members Value of assets new participants

Number of assets

Exceed the size of the fund level index by 2020

Launching with pan-European coverage

11

* As at December 2018

HOW YOU CAN USE THE ASSET LEVEL INDEX

Asset performance and market comparison

Main goals

13

Asset Level Index

____

Comprehensive measures of performance of real estate assets across Europe

Get deeper insights into

drivers of your vehicle

performance

Create your own

customised indices with

the online analysis tool

and compare

Formulate strategy and

compare it to a market

index

Improve industry transparency and data accessibility

Data-driven investment decisions

Risk Management Framework

Asset allocation

Portfolio construction

Investment strategy

Portfolio monitoring

Performance measurement

14

What you get

15Note: data is not yet approved by INREV

Market analysis tool Portfolio analysis toolPortfolio vs Market comparison

tool

Data Input tool Asset level performance Quarterly report

Portfolio and asset level analysis

16

Portfolio analysis and market comparison

17

Asset level performance reporting

18

WHERE WE ARE NOW

Launch at 2019 Annual Conference

Five years of annual…

20* In local currency

10.8%11.1%

7.0%

10.0% 10.2%

0%

2%

4%

6%

8%

10%

12%

2014 2015 2016 2017 2018

% r

etu

rn

Income return* Capital growth* Total return*

…and quarterly data from launch

21* In local currency, quarterly annualised

10.8%11.3%11.4%

10.7%11.1%

10.1%

8.8%

7.3%6.9%

7.9%8.4%

9.8%10.0%10.0%10.7%11.0%

-1%

1%

3%

5%

7%

9%

11%

13%

15%

2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

% r

etu

rn

Income return* Capital growth* Total return*

Evenly spread across Europe

22Note: data is not yet audited/approved by INREV

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

Index composition by country

Germany Netherlands France United Kingdom Switzerland Spain

Poland Italy Portugal Sweden Belgium Others

… and sectors

23Note: data is not yet audited/approved by INREV

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

Index composition by sector

Office Industrial / logistics Retail Residential Health care

Mixed Parking Hotel Other real estate type Student housing

Leisure Aged care Agricultural

Country and city level performance

0%

5%

10%

15%

20%

25%

2014 2015 2016 2017 2018

%, to

tal re

turn

Netherlands

Netherlands

Amsterdam

Rotterdam

0%

5%

10%

15%

20%

25%

2014 2015 2016 2017 2018

%, to

tal re

turn

Germany

Germany Frankfurt

Berlin

24* In local currency

0%

5%

10%

15%

20%

25%

2014 2015 2016 2017 2018

%, to

tal re

turn

United Kingdom

UK London

Birmingham

Sector comparison

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2014 2015 2016 2017 2018

%, to

tal re

turn

Offices Retail Residential Industrial/Logistics Other sectors

25* In local currency

Portfolio analysis tool

26Note: data is not yet audited/approved by INREV

Comprehensive analytical tools and reports

27

Detailed statistics for each selection

28

29

Further promotion to get new participants

Expand coverage to make this index even more relevant and valuable

Investor and fund manager data sharing

Attribution and reconciliation analysis tool

Global Asset Level Index

2019 2020 2021

What’s next?

HOW TO PROVIDE DATA

Launch at 2019 Annual Conference

Data input tool launched in June

31

Simple validation and sign off process

32

Asset performance analysis

33

WHAT WE ASK FOR

Join this industry initiative

Join now for 100% discount on year 1 fee

35*applies to data contributing managers and investors

EUR 7,500 annual fee*

Historical data starting from

Q4 2013

3 years of data going forwards

Non-data contributing investors pay an annual fee of EUR 15.000

First year – 100% discount to data contributing investors and managers

Join the club

Here to help

37