- December 1, 2018: Vol. 12, Number 11

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UK review highlights growing benchmarking concerns

by Marek Handzel

A report published by the Investment Property Forum (IPF) has highlighted a number of concerns over the efficacy of real estate benchmarks.

Current Practices in Benchmarking Real Estate Investment Performance, which was compiled with the help of Heriot-Watt University in Edinburgh, Scotland, is based on the views of a number of major UK real estate institutions. These include 17 investment houses with £180 billion (€207 billion) of real estate assets in the UK and overseas assets under management worth in excess of £515 billion (€592 billion).

The IPF study has identified widespread reservations about benchmark accuracy and the monopoly status that benchmark providers enjoy. It has also brought up disquiet around a lack of transparency, the degradation of samples as markets change, the effectiveness of designated risk measures, and timeliness of delivery.

In relation to accuracy, the report points out that MSCI — the UK’s dominant benchmark pr

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