INREV has overhauled its industry guidelines for European non-listed real estate funds as it pushes for the creation of a global reporting standard.
The European Association for Investors in Non-listed Real Estate Vehicles launched the new guidelines at its annual conference in Berlin, changing key items that were created before the global financial crisis.
The revised guidelines take into account regulatory changes, cover liquidity issues for the first time and cater for different vehicles such as joint ventures and club deals.
Approximately 300 organisations in Europe, the Americas and Asia were consulted during an 18-month review of the original guidelines, which were developed in 2005 and formally integrated in 2008.
INREV said the move would 鈥渂oost transparency and performance analysis鈥�, and 鈥減romote greater investor choice鈥�.
Speaking in Berlin, Matthias Thomas, INREV chief executive, said the guidelines were intended to improve reporting across all three continents.
He said: 鈥淕eographically, we are aiming for other regions than Europe. At the moment, it鈥檚 going to be a nightmare if you try to compare [different] NAVs, for example. The foundation of a global standard would help compare on a like-for-like basis.鈥�
Lonneke L枚wik, who is stepping down as director of professional standards at the end of the month, said the industry had 鈥渘ow been through a full financial cycle since the guidelines were first formalised鈥�, and 鈥渋t was clear to us that there was not only a need to update the INREV guidelines but to ensure that they could respond to market changes.鈥�
Singapore鈥檚 sovereign wealth fund Government Investment Corporation (GIC) welcomed the new guidelines. Neil Harris, head of asset management for real estate in Europe at GIC, described them as a 鈥渟ignificant step forward鈥� for the real estate funds industry.
鈥淪tronger reporting and increased transparency are vital for accurate performance measurement, which in turn can help make real estate an even more attractive asset class for investors,鈥� he said. 鈥淎s well as encouraging compliance with the new guidelines to improve consistency of reporting and governance, INREV are also promoting best practice throughout the industry, both of which we strongly support.鈥�
The new guidelines have been launched three months ahead of the authorisation deadline for the Alternative Investment Fund Managers Directive (AIFMD), and INREV said they 鈥渁cknowledge and reference鈥� the new regulations 鈥渨here needed鈥�.
The changes also include greater guidance around frequency and level of disclosure of reporting, the inclusion of liquidity, such as redemptions, and fund terminations and extensions.
