ANREV, INREV and NCREIF have launched the first Global ODCE Index, which is the latest in a suite of global indices aimed at enhancing the transparency of the nonlisted real estate investment industry. The new index focuses on open-end diversified core equity funds across all three global regions.
The new index, with a combined total gross asset value of $403 billion, is expected to further transparency and drive capital to the nonlisted real estate sector.
Launching at the NCREIF Summer Conference in Chicago, the Global ODCE Index reflects the growing need for data on a global scale as investor appetite for globally diversified real estate portfolios gathers momentum. The consultation release measures the net asset value quarterly performance, net of fees and other costs, with a near-term plan to report gross of fees performance.
The index will aid all aspects of real estate investment decision making, from asset allocation to portfolio measurement and comparison, providing greater information flow, and more in-depth analytics. The latest release strengthens and supports the ODCE as a product and brand — a recognized index with more than 40 years of rich data history in the U.S. and rapidly evolving Asian Pacific and European ODCE Indices. Global ODCE is the next logical step in understanding the global real estate market with a clear core peer-set for all three regions.
The index will be of particular value to investors operating on a global scale and will aid better understanding of global core returns as well as to investors for whom the relative illiquidity of real estate has proven an obstacle, historically.
On a five-year annualised basis, the Global ODCE Index shows an aggregated total return of 4.89 percent. The U.S. outperformed the other two regions with a total return of 6.56 percent. Asia Pacific posted 4.89 percent and the return for Europe was 3.26 percent.
“The launch of the Global ODCE Index is a fitting tribute to the long history that ODCE funds have had in the U.S. and highlights the evolution of global capital and our ability to adapt and advance the industry,” said Dan Dierking, president of NCREIF. “The index is one of the key tools that the three regional associations have to pursue our common ultimate goal, which is to help reinforce the message that real estate has earned the right to be considered as a mature and transparent asset class.”
Mike Consol (m.consol@irei.com) is senior editor of Real Assets Adviser. Follow him on Twitter (@mikeconsol) and LinkedIn (linkedIn.com/in/mikeconsol) to read his latest postings.