INREV, the European Association for Investors in Non-Listed Real Estate Vehicles, has released its annual Asset Level Index report which is a new annual and quarterly pan-European index measuring real estate asset level performance covering around 20 national markets and all key real estate sectors in Europe.
It includes 6,038 assets valued at €151.6 billion as at end 2018. Annual performance is calculated using a chainlinking methodology and excludes the effects of leverage and vehicle level costs, fees and expenses.
According to INREV, the pan-European annual Asset Level Index has posted a total return of 10.23% over 2018, capital growth was 5.74% and income return 4.27%.
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The best national performance came from the Netherlands with a robust total return of 15.46%, much of which was driven by strong capital growth in the residential sector. Germany and France posted total returns of 12.18% and 9.55%, respectively.
By contrast, the UK – which represented the largest percentage allocation of the whole index (28.3%)-demonstrated the weakest performance of the major European countries with a total return of 5.89% in 2018. Just 1.17% of the UK’s overall performance was attributed to capital growth.
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In terms of sectors, residential delivered the most compelling results with a total return of 16.36%, closely followed by industrial / logistics at 15.51%. The office sector achieved a total return of 9.48%. Retail fared less well, with a total return of 4.15% and negative capital growth of -0.73%.
Commenting on the first annual Asset Level Index, Henri Vuong, INREV’s Director of Research and Market Information, said: ‘This is an impressive set of returns that will no doubt reinforce investors’ current positive view of non-listed real estate, which is based on an underlying asset class in good health that’s built on strong foundations.’