According to the 2016 ANREV/INREV/PREA Investment Intentions Survey, investors show a strong intention to increase their allocation to joint venture and club deals. This trend has been observed for the past few years;  clubs and JVs are sometimes seen as an alternative to non-listed real estate fund investment.

In April 2016, ANREV Professional Standards Committee hosted a round table where a number of investors and managers discussed the pros and cons of JVs, including issues of governance, reporting and structuring. The Committee would like to thank the investors and the funds managers who have participated in the discussion as well as Mark Cooper from Asia Property who kindly helped to facilitate the discussion and wrote this paper.

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APAC is home to three of the world’s four most populous nations (China, India and Indonesia) and growing rapidly. Prior to the global financial crisis offshore investors mostly pursued high risk property investments to capture the tremendous growth of the region. However, many investors achieved disappointing returns due to an underestimation of property investing risk within Asia’s emerging markets. However, we see a structural decline in investing risk within APAC’s high-income economies which is attracting low-risk overseas investors to the region; they are allocating capital to diversify as well as to potentially achieve higher returns than are available in their home market.

This paper outlines Asia Pacific’s investment landscape in terms of its historic return performance, its risk characteristics, and the size of the institutional property universe. We believe APAC’s high-income markets are a low risk means of accessing the growth of its emerging markets, as they urbanise and experience a catch-up in incomes with the industrialised west.

With the participation of many of their volunteer members, ANREV, INREV, NCREIF and PREA are pleased to present the Fee and Expense Metrics – Phase I Results – the first joint publication towards global reporting standards. These Phase I Results bridges gaps in terminology and associated definitions of the most common fees and costs.

Investors can use this report guidance to enhance their understanding of fees (between investment managers and their investors) and costs (charged to a fund by external service providers). These include the Total Expense Ratio (TER) and the Real Estate Expense Ratio (REER) contained in the INREV Guidelines and the Real Estate Fees and Expenses Ratio (REFER) contained in the NCREIF PREA Reporting Standards. In 2017 we expect to build on this product as we complete the development of a globally consistent set of measures of fees and costs; thereby equipping investors with the tools needed to compare costs across regions.

The Global Standards Steering Committee (SSC) has other projects progressing including a converged glossary of terms and also reporting asset management information similar to that provided within INREV’s Standard Data Delivery Sheet. They have also begun discussing Net Asset Value (NAV).

Please contact Amélie Delaunay for further information.

• Real estate assets under management grew to US$2.19 trillion
• The big managers keep getting bigger
• North American and global strategies are much larger than other strategies

Total real estate assets under management (AUM) reached US$2.19 trillion in 2015. Overall, the 10 largest fund managers represent 41.0% of the total AUM, up from 36.5% last year.

With US$149.8 billion of total real estate assets under management, Brookfield Asset Management tops the list in the 2016 survey. The Blackstone Group ranks second overall with US$147.6 billion of total real estate AUM, while TH Real Estate & TIAA occupies the third position with US$120.8 billion of global real estate AUM.

In this issue, we have included: 

 Australia

• Australian federal budget update: Tax change to attract capital from overseas investors

China

• China new VAT rates and rules: Impact to real estate and construction industry

• China releases Five-year Plan for financial reform

• AMAC issues administrative rules on distribution of private funds

Hong Kong

• SFC issues circular on timetable for implementation of new professional investor regime

Japan

• The impact of recent amendments to the Article 63 exemption on partnership-type funds in Japan

Korea

• New legislation mandatory strengthened corporate governance standards on financial companies

Singapore

• MAS announces initiatives to boost fund management industry

Global

• New margin requirements for transactions in uncleared derivatives will affect real estate, infrastructure, private equity and microfinance fund managers in Asia

Lastly, we would like to thank our working group who helped putting together the Newsletter.

For details of this working group, please click here

New Sustainability Reporting Guidelines bring reporting methods up-to-date

Sustainability initiatives have advanced to play an important role in the operational performance of real estate investment vehicles and sustainability reporting has become a standard part of a company’s annual reports.

To support this the INREV Sustainability Reporting Guidelines have been revised to increase visibility and provide insight into a vehicle’s Environmental, Social and Governance (ESG) efforts and also details their next course of action for improvements.

Data contributions were received from 84 funds with a total gross asset value of US$87.9 billion. The All Asia Index headline return was 11.7% in local currency for 2015 compared with 9.0% in 2014.

Further detail of the sub-indices which cover fund style and various geographies can be found in the full report.

We would like to thank all the companies that supported the data collection exercise and look forward to your continued support in the next round of data collection next year.

Together with the release of Annual Index 2015, ANREV has recalculated the Q4 2015 Quarterly Index. Members can move to ANREV Analysis Tool to check out the updated result.

To participate in the ANREV Index, please contact Amélie Delaunay at [email protected] or Henry Lam at [email protected] to take part in this industry-led initiative or if you have any questions about the ANREV Index.

Record performance of the ANREV all funds index

• ANREV’s All Funds’ Index returned 4% in Q4 2015
• Core funds, Australian funds, open end funds and single sector funds all register their best performance since the inception of the ANREV index in 2010

Data contributions were received from 84 funds with a total gross asset value of US$81.9 billion. Further detail of the sub-indices which cover fund style and various geographies can be found in the full report.

We would like to thank all the companies that supported the data collection exercise and look forward to your continued support in the next round of data collection in May.

To participate in the ANREV Index, please contact Amélie Delaunay at [email protected] or Henry Lam at [email protected] to take part in this industry-led initiative or if you have any questions about the ANREV Index.

It is an index showing the performance of non-listed real estate funds on a global scale and is created by ANREV, INREV and NCREIF. This publication includes the performance figures up to Q4 2015.

The GREFI was updated for the first time on a quarterly basis following the first quarterly release of the ANREV Index for Q1 2014. From Q1 2014 onwards, the GREFI has been updated 12 weeks after the quarter end. This index release follows the same structure of previous releases. The technical specification has also updated and all numbers are also available in an Excel file.

The GREFI Q4 2015 update release includes the performance of 430 funds compared to 454 funds as of Q3 2015. This difference is due to the lower number of funds delivering data in Asia Pacific and Europe, as some funds need additional time to finalise and audit year-end figures.

Please send your feedback on this consultation release to [email protected].