During the course of November, MSCI organised three separate events across three continents, focused on risk management for Asset Owners. Each event held specific sessions on the analysis of private real estate risks within the broader multi-asset-class context, and more specifically within real estate itself.
Real estate's unique attributes may have put it at a disadvantage in the past, but a better understanding of what it can offer investors should mean that its role in multi-asset portfolios becomes increasingly secure.
"Benchmarking" was a central theme of this year's IREI/APREA VIP event in Hong Kong, with specific sessions on this topic throughout the conference. As usual, the VIP conference attracted industry leaders from asset owners and managers to debate issues and opportunities facing investors in Asia.
IPD has recently produced its latest GEMCode, which sets out a performance framework for property occupiers on a global basis. At the Facilities Management and Property Event, held in London this October, IPD's Christopher Hedley explained to delegates the features of the new code, with its emphasis on defining occupier performance from the tenants' point of view.
In October, IPD hosted a workshop at the annual KOVON conference, held in Apeldoorn. KOVON is a knowledge-sharing organisation in the field of building maintenance, in particular for social housing associations. The conference theme posed the question, "Is the performance of a maintenance budget likely to be better by in-sourcing or outsourcing?"
Prior to the annual presentation in September of the IPD/RICS research, which compared valuations with transaction prices in the Dutch market, experts from Germany and the Netherlands got together to reflect on the perceived differences between valuations in both countries.
IPD data already plays an essential role for the world’s leading real estate investment businesses. These information resources interlink through a consistent data structure worldwide, allowing for meaningful comparisons of property performance, as well as the detailed interrogation of return...
In September, IPD Occupiers launched their tenth edition of the IPD Global Estate Measurement Code for Occupiers (GEMCode). The editor-in-chief, Christopher Hedley, in his presentation on the new IPD GEMCode, explained the overall objective of the 10th edition of the handbook.
The IPD-Fachtagung conference on 'Real Estate Forecasting and Modelling', held in Frankfurt this September, discussed different approaches to forecasting and asset allocation in the real estate business. The event's presentations and discussions illustrated the different views and needs of investors and mortgage banks when using forecasts.
IPD's Peter Hobbs presented a paper entitled 'Risk Analysis Responses to Commercial Real Estate Regulation', at the Commercial Real Estate Risk Conference in London this September.
The third consultative release of the IPD Global Quarterly Property Fund Index took place earlier in September, with the full index still to be formally launched for Q4 2013. This data provides some interesting insights into the impact of leverage and other aspects of fund structuring on fund performance around the world.
Real estate is gaining favour among alternative asset classes investors, due to its consistent income return and distinct risk profile. Smart beta strategies, now increasingly in vogue, stress the benefits of using these characteristics to increase diversification benefits and limit risks while targeting market levels of return.
During a lecture at the European Business School on 20 August 2013, IPD's Daniel Piazolo presented the arguments against, but also the opportunities for, the use of derivatives on real estate indices.
On the 16th of September IPD Occupiers will be launching the first combined cost, space and efficiency measurement code for occupiers of commercial real estate.
German Spezialfonds with allocations outside of the conventional office, retail and industrial sectors are growing at a faster rate than in any other sector, according to the latest research from IPD Germany.
A seminar in London, organised jointly by the Society of Property Researchers (SPR) and the Association of Property Lenders (APL) stressed the importance of lenders improving their understanding of the real estate cycle.
Rural, in terms of performance, has left most other forms of real estate trailing in its wake over the last 12 years, with returns more than doubling those in the mainstream commercial sectors.
There have been announcements throughout 2012 and the first half 2013 of institutional investors either breaking into, or increasing their exposure to the UK Private Rented Sector (PRS).
Many of the 'alternative' real estate sectors to be discussed at the IPD Alternative Real Estate Investment Conference in October are not reliant on short term economic growth in the UK, which is increasingly steering the decisions of institutional investors.
The latest IPD UK Quarterly Briefing revealed UK real estate returns rose to 1.9% in Q2, as assets outside of London started to see improvements alongside the growing UK economy.
During a recent lecture to the International Real Estate Business School at the University of Regensburg, IPD's Daniel Piazolo explained that the levels of sustainability in German property assets do have a quantifiable effect on commercial real estate returns.
After six years and one of the severest property recessions in recorded history, the Irish market seemed on the cusp of recovery at the end of June. Capital values, which had fallen by over 65% across 27 continuous quarters, finally stopped declining at the headline level, delivering 0.0%.
International real estate investment strategies allow for diversification through the different performance characteristics of national markets. For instance, the volatile returns of America and the UK can be offset by safer markets in Northern Europe.
IPD's Lorenzo Dorigo, on the panel at the Property EU Netherlands Investment Briefing at PROVADA in Amsterdam last month, presented IPD data on real estate performance in the Netherlands since the onset of the financial crisis in 2007.
Premier Cercle - 18 juin 2013 Paris Indicateur vert 2012 de l'immobilier d'Investissement : Performance des bureaux verts
The recent Pan-European hotels investment performance figures from IPD demonstrate the resilience of European hotel investments in what has been a tough economic climate, and a similar level of outperformance can be seen in the Asia Pacific region.
According to AXA research the cost of occupancy for retailers needs to fall by 5% on average in the UK by 2016 to maintain profitability.
Delegates were told at the IPD/SPR RealWorld conference that the poor economic performance of the UK was acting at a disconnect to prime commercial property prices, which are growing due to increasing investor pressure for reliable income producing assets.
It might be tempting to think that hotels are a luxury sector and are therefore particularly vulnerable in tough economic times. We can all survive without as many holidays when the money gets tight and even business travel is often at the more discretionary end of company budgets.
The IPD UK Development Report, launched last week at joint seminars in London and Edinburgh, highlighted the growing proportion of refurbishments and redevelopments in the UK developments sector. In 2006, they accounted for just 28% of completions, and by 2012, this had risen to 62%.
The first major analysis into the performance of Dublin's office market since the onset of the financial crisis is being launched this week by IPD, in conjunction with Burlington Real Estate (BREL).
Given the relative immaturity of its real estate markets, the IPD Pan-Asian Return Indicator has shown surprisingly limited volatility over the last six years, the period of the Global Financial Crisis (GFC) and downturn.
Some of the latest research from IPD discusses the place of real estate in a global multi-asset class portfolio, as investors increasingly diversify away from the traditional sectors of bonds and equities.
The latest IPD European Property Investment Conference, held in Lisbon at the end of May, had some promising messages for real estate as an investment asset class.
The 25 most developed global commercial real estate markets now have a total market value of $5.4 trillion, according to estimates from the IPD Global Annual Property Index, with 24.8% (or $1.3 trillion), now being captured directly in global property indices.
Despite the divided UK retail market, supermarkets have performed with remarkable uniformity across the UK in the last year, according to IPD's Greg Mansell, who made the comments while presenting the IPD Supermarkets Investment Report at Supermarkets 2013 - the UK's only dedicated conference for the sector.
Despite the largest reforms to the primary care trust since its inception, and the significant readjustments expected in the ailing care homes sector, healthcare investments still returned 7.2% in 2011.
In its response to the De Montfort Report on commercial property lending, which saw UK real estate debt decline by 8% in 2012, IPD identified the need for careful asset selection and active management amongst lenders wishing to enter the market.
The Pension Real Estate Association (PREA) and IPD held a joint webinar on Monday, May 20 to release the Q1 2013 results for the PREA/IPD U.S. Quarterly Property Fund Index.
IPD released the annual IPD German Office Rent Reversion Index (DMX) at a launch held to an audience of around 65 delegates, in Frankfurt, on 16 May 2013. Focusing on rents of standing office leases compared with sustainable office market rents, the index shows the potential for rental growth in Germany's major office locations.
The current status quo and the growth prospects of the CEE real estate regional markets was the topic of the IPD/PIE Central and Eastern Europe Conference in Vienna yesterday. The event was again a focal point for delegates to learn more about the region's prospects, with experts advising on a section of Europe that is likely to continue growing in the future.
The growing importance of quality of income in the UK, rather than quality of asset was discussed at the IPD/IPF Quarterly Briefing on 2 May 2013, with results for the first quarter of the year showing secondary assets with long, secure leases to be outperforming prime stock.
Ian Cullen's report from late 2007, the first few critical months of the downturn, addresses the rise in the use of indirect and unlisted vehicles, their growing use of debt, and the ensuing difficulties presented in performance measurement.
Yields in excess of 8.3% for retail stock sold at auction give buyers considerable "room for manoeuvre" when negotiating lettings, according to IPD's Greg Mansell. This presents one of the few bright spots for the beleaguered UK high street where much can be gained from lowering rents for retailers.
At the third "International Strategies in Real Estate" Executive Education program at Harvard University Graduate School of Design on 22-26th April, IPD's Peter Hobbs delivered a presentation focused on understanding cross-border real estate flows.
In addition to the announcement of the performance results of real estate in Belgium for 2012, an IPD Belgium Annual Property Index Launch was held on Tuesday 16 April 2013 in Brussels, where discussions focused on 'The market for real estate funds after the implementation of the Alternative Investment Fund Managers Directive (AIFMD)'.
IPD report from 1992 shows the distance that property valuation methodology has come in the last two decades.
According to the IPD Global Annual Property Index, in 2012 global real estate returned 7.4%, somewhat down on 2011, but still in recovery with property values rising. Over the last three years, real estate has performed more strongly than either of the major asset classes, its return of 8.8% for the period eclipsing that on both equities (7.0%) and equities (6.6%).
On 11 April 2013, MSCI ESG Research, the Centre for Responsible Banking and Finance (RBF), University of St Andrews, VBDO and UKSIF hosted three regional Global ESG Leaders webinars for APAC, EMEA and North America.
The role of government is important in determining investment prospects in many residential and social housing markets around the world. On the one hand, there is the desire to expand the privately-generated supply of social and affordable housing, as was observed by speakers from the UK, France and Russia.
Speakers in this IPD co-organised session stressed the continuing uncertainty surrounding key elements of European regulation, even with implementation deadlines fast approaching.
Panellists during this session emphasised that the rapid urbanisation taking place in many African countries was offering big opportunities for real estate investment, as long as the simultaneous risk of chaotic development can be overcome.
Both listed funds and REITs continue to have a place in investment portfolios, according to panellists in an IPD co-organised conference session at MIPIM.
Robert Bonwell, CEO EMEA Retail at Jones Lang LaSalle, stressed that retail has taken place through many channels over a long period - it's only the advent of internet retail that is truly new.
Home Retail Group's plans to cut 75 Argos stores from its portfolio when their leases expire would, five years ago, have been unthinkable. Then again, in that short time we have seen three decades of retail expansion come crashing to an end.
Across asset classes, 2012 was the year of strong equity performance, with the MSCI World Index posting a return of close to 15% for the year as a whole. Real estate securities markets saw even stronger performance, at over 20% for most major markets.
While many European property markets have seen big upheavals over the last five years, Sweden has produced a level and consistency of performance that is the envy of the rest of the continent's real estate professionals.
In a property market that currently dreams of the sky-high 19% IPD index returns of 2006, there are clear routes to navigate the challenges of a comparatively flat market: picking the right assets and ensuring you have the specialism to get the most from them.
The sweeping Georgian facades that peer into Brighton's curious side-streets offer an appropriate backdrop for the property investment world's annual seaside soiree. Like the slightly ramshackle coastal architecture of yesteryear, everyone has had to regroup, dust themselves off and get back into place.
Investment theory teaches that real estate performs as something of a hybrid between equities and bonds. But in recent years, it seems that UK property has taken on more of a bond-like mantle, both in the minds of investors and in some of its performance characteristics.
It may be synonymous with Bank Holidays, stag weekends and jaded eighties arcades, but it's Brighton's reputation as being a robust, hard wearing 'rock' of a town that continues to set it as the perfect backdrop for commercial property's annual shindig.
As the UK's leading landlords, investors and pension funds gather today in Brighton for the two-day annual IPD/IPF Property Investment Conference, a new report reveals the full extent of secondary property value declines to be worse than initially feared.
UK institutions, and in particular pension funds, have a reputation for risk aversion when it comes to investment allocation decisions. On average, the typical institutional investment portfolio consists of 45% equities, 45% fixed income and 10% real estate.
Tim Horsey, Editor of Real Return, examines IPD's recent innovative report on this part of the industrial investment landscape.
Anthony De Francesco, Managing Director IPD Australia and New Zealand, explains that the new Australian infrastructure index will bring much needed transparency to the sector.
Malcolm Hunt explains why residential real estate is coming onto UK institutions' radar. For those of us who remember our student digs, I'm willing to bet that we would never have considered renting professionally managed, privately built flats. Student dives were the norm, unpleasant and character building as they were.
Tim Horsey, Editor of Real Return, reports on the IPD Alternative Investments Conference The boundaries of real estate as an investment asset class are being redrawn. The success of the IPD Alternative Investments Conference, held in London on 23 October, suggests that something is shifting.
Tim Horsey considers the importance of income risk for real estate investors Income is moving higher up the risk agenda for real estate investors worldwide. Three of the four other articles in this issue of Real Return refer to income risk, and it is one of the main focuses of the role of Hauke Brede, Chief Risk Officer at Allianz Real Estate, who is interviewed in this edition.
Luurt van der Ploeg, CFO of Vesteda, speaks to Real Return about the importance of risk management for the organisation and the likely impact of AIFMD (Alternative Investment Fund Managers Directive).
Andy Armstrong, Head of UK Real Estate at HSBC' will be speaking in the opening session of the IPD/IPD Conference at Brighton on 25-26 November. Here he talks to Real Return about his organisation's approach to risk management for property loan books, which now includes the use of IPD data.
Brent McElreath, consultant to IPD in the US, explains how regulation here is increasing the pressure for risk measurement services like IRIS.
Ian Cullen, Founding Director and Head of Information Standards at IPD, explains how its new Transactions Linked Indices give a clearer perspective on the volatility of real estate markets.
With the summer now over it is an opportune time to take stock. With commercial property values back in decline and the outlook, according to consensus forecasts, for flat or negative growth over the next five years, the onus is back on income return to provide the bulk of investors' returns, in the near term at least.
Glenn Corney, IPD's newly appointed Head of Lender Services, discusses the evolution of real estate capital markets, and how IPD is working with lenders to bring about much needed change.
Relying on private equity to bridge funding gap a 'pyrrhic' victory Though global private equity flows are a viable bridge for the funding gap set to hit European real estate in the next five years, heavily discounted sales brought about by new regulations would make it a pyrrhic victory for those disposing of the assets.
New investment vehicles are needed in the indirect UK property market to meet changing institutional demand, particularly from the rising number of defined contribution pension schemes and retail investors.
Falling capital values have re-emphasised the importance of income returns to property investors, but the economic difficulties besieging the UK market are leading to increased risks to this normally stable component of returns.
As Chief Risk Officer, Brede is responsible for risk management for all Allianz's real estate equity investments globally - held both directly and indirectly - totalling some 20bn in value. "These investments have been made on behalf of the Allianz national insurance businesses," explains Brede, "with those in Germany, France and Switzerland taking the largest shares, broadly in line with the structure of their liabilities.
Does stability offset the price premiums of long leased assets in the UK? Falling values and shorter tenancies in the UK property market have led to more UK investors and funds specifically targeting long leased assets, in a bid to protect income streams and values.
Daniel Piazolo and Sebastian Glaesner investigate the investment performance of Spezialfonds. Did they outperform open-ended public funds?
If 2010 represented a comeback year for global property markets, then 2011 must have given real estate investors pause for concern. The global supply chain faced dual challenges, first from political instability in the Middle East and North Africa and then from a devastating earthquake in Japan.
Hopes for a visible sign of recovery in the Irish property market were postponed for at least another quarter in Q2, as still weak demand from tenants for space led to a further 1.8 per cent fall in property values across Ireland.
Bleak reading again for the industry this quarter - with values falling by a further -1.0 per cent, and total returns sliding to 0.4 per cent, lower even than Ireland's.
This article brings together some key findings from the latest results of IPD's European unlisted fund indices, with the continent starting to see currency upheavals hitting the recovery that had emerged in the previous two years.
Mark Clacy-Jones, Head of Indices at IPD, tells Real Return about the IPD Global Index and the ever-expanding suite of national market indices which underlie it - as well as highlighting some key worldwide results for 2011.
Christina Cudworth, IPD Group Marketing Director and Head of Sustainability, and Jess Stevens, Sustainability Risk Analyst, explain how IPD is helping to fill the performance information gap for real estate sustainability around the world.
In the wake of this year's Pan-European Index and Global Index launches, IPD's latest global data is now available at city level in a new format, explains Greg Mansell, Senior Research Manager at IPD.
Attribution analysis for German real estate funds: Dissecting institutional fund returns in property returns, liquidity return, leverage and TER
The global economic landscape shifted dramatically over the course of 2011. The year opened with an upbeat outlook for economic growth, but within weeks, downside risks began piling up.
John Blackwell, Managing Director of Quora Consulting, will be speaking at the IPD Occupiers Conference on 3rd July, in a session on the changing workplace. Here he tells IPD how he believes organisations should be thinking about the issue of workplace change.
This edition of Real Return is dedicated entirely to recent IPD innovations in its market information services. In this opening article we outline some of the most important developments and speak to Sabina Kalyan, Chief Economist for CBRE Global Investors, about what they mean to her.
Investors and managers alike will get most out of their benchmarking by establishing relevant yardsticks for assessing their funds' performance.
IPD Germany, which began offering property investment benchmarking in 1998, has always placed a strong emphasis on the measurement of property operating costs. Overall, the level of operating costs incurred by investors stands at around 19% of gross income, a higher level than in the UK and France, though considerably lower than in the Nordic region.
On 16th March 2012 IPD will release a brand new Pan-European Funds Index, capturing, for the first time, the performance of funds devoted to investment across the continent. This Index will measure full net asset value-based fund performance, as received by the investors in the funds covered, and will represent the first benchmark for this kind of fund with full analytical capacity.
Derek Williams, Director of Private Real Estate at Russell, speaks about his organisation's views on benchmarking. Williams leads the global private real estate team and oversees all manager research and portfolio management activities for Russell's private real estate investments.
By Ben Habib, CEO, First Property Group plc. Ben Habib, CEO of First Property Group plc, the commercial property fund manager, looks at the current situation in the UK property market and shares his thoughts on the London ‘bubble’…...
Outside of the Capital, growth remained lopsided in 2011, but regional town and city performance was not the write-off that reports suggest. Levels of supply, government cuts, disposable incomes and local employment were variable factors which led to a significant disparity in returns in cities barely fifty miles apart.
Residential, the forgotten core. The market is in a challenging position today. While first time buyers struggle to get on the ladder, (and their numbers are set to increase by 1.5 million in the next decade) the construction industry is stuck at absolutely inadequate levels and based on a broken mortgage debt model.
The first edition of Real Return for 2012 is exclusively devoted to real estate benchmarking and portfolio analysis. This is appropriate at the start of the year, as benchmarking is all about change - understanding changes that could be made to an investment portfolio in order to raise performance in the future.
Developing the structure and skills to make residential yields profitable. There are over 26 million homes in the country, worth about £5.2trillion. About 5m of these are in the social rented sector, 4m in the PRS (Private Rented Sector), 12m in mortgages, and 8m are owned outright.
Is the upwards only rent review the red squirrel of the leasing market? Where to start? This is a journey into a new land, and, as with every journey, we need to know where we want to end up. The question is, what is the alternative to the standard FRI upward only rent review, and is the UK lease still fit for purpose?
What you cannot avoid, enjoy European regulation has increased considerably in the fallout from the credit crunch. The last few weeks have seen even more devolution of powers to the European technocrats. But though we are transfixed by Europe, we should try to look at regulation as a whole - there is plenty from our own government and internationally - and focus on the regulatory framework this will create over the next five or ten years.
London continues to be the top performer, but returns outside the capital offer an attractive alternative UK residential investment performance by asset quality (yield) and Region.
Today's news headlines are dominated by the Euro crisis and the volatility it is causing in government debt spreads and equity markets. Even for the insurance business, this is diverting attention from regulatory issues such as Solvency II.
What is important in the UK property market? Firstly, size. The UK is the fourth largest property investment market in the world, which brings a lot of action, from both domestic and international investors. While the Canadian and Australian markets are relatively small, and still struggling with the idea that their investment cannot be absorbed, the UK has enough depth for a considerable amount of interest.
Marieke van Kamp, Head of Real Estate for ING Insurance Benelux, believes the latest draft regulations should be viewed positively by insurers investing in indirect property funds.
Malcolm Frodsham, IPD Director of Research, tells Real Return about a new IPD UK project to define active management's contribution to fund styles - for the purpose of benchmarking active management in the near future.
Real Return examines the Giliberto-Levy Commercial Mortgage Performance Index, one of the most recent additions to the IPD index stable, which may soon be joined by similar debt indices in Europe.
Cameron McVean, IPD Head of Fund Reporting, speaks to Real Return about how IPD property fund investment reporting is set to enrich investors' understanding of their fund holdings.
Kevin Swaddle, Managing Director, IPD Asia talks to Real Return about the Pan-Asian research report now covering nine markets.
The importance of IPD's Solvency II Review, published in May, was borne out in discussions at the recent IPD European Property Investment Conference in Amsterdam.
Janet Perry of PRUPIM, Alan Meakin of The Crown Estate and Nigel Bennett of RREEF speak to Real Return about how IPD UK portfolio analysis reporting helps them.
IPD is well known for supplying the real estate industry with reliable market research, based on accurate databases of property information. IPD's Research Updates area offers regular views from staff and guest contributors from the industry; it covers indices, risk and performance analytics, events and ground-breaking new research for the owners, investors, managers, lenders on and occupiers of real estate. Research Updates covers real estate and real assets from around the world so that there is only one place to visit for fresh, relevant and interesting opinions.