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Robust returns: Strong performance continues for institutional real estate
The quarterly total return for the NCREIF Property Index (NPI) was 5.33 percent for first quarter 2022. The NPI consists of 10,137 investment-grade, income-producing properties with a market value of $897 billion. The market value breakdown by property type is about 28 percent office, 27 percent apartment, 15 percent retail, 30 percent industrial and less than 1 percent hotel properties. Not surprising, the greatest increase has been the allocation to industrial properties in recent years. The NPI includes property data covering more than 100 CBSAs.
The rolling annual return for the past four quarters was 21.86 percent, which is the highest since first quarter 1980 and the second highest in the 44-year history of the NPI.
The quarterly return of 5.33 percent consisted of 0.99 percent from income and 4.34 percent from appreciation. Appreciation is after the deduction of capital expenditures. Market values before considering capital expenditures increased by 4.49 percent