Key takeaways:
- The MSCI/APREA Pan-Asia Quarterly Property Fund Index (APFI) gives managers, both on the public and private markets, the opportunity to differentiate their strategies
- Focused on unlisted open-ended pooled real estate funds with an Asia Pacific investment mandate, the index is based a sample of four funds with a total net asset value of US$7.2 billion
- Asia Pacific Real Assets Association (APREA) aims to enhance transparency in the region’s real assets sector by providing its members with reliable benchmark metrics
- As of December 2020, unlisted private real estate funds made up only 19% of the institutional real estate market in Asia Pacific, according to research by MSCI
Singapore – 13 September 2021. Asia Pacific Real Assets Association (APREA) has partnered with MSCI Inc. (NYSE: MSCI), a leading provider of critical decision support tools and services for the global investment community, to launch a new property fund index to track the rapidly growing Asia Pacific institutional real estate sector.
The MSCI/APREA Pan-Asia Quarterly Property Fund Index (APFI) is a transparency tool that gives managers and REITs the opportunity to differentiate their strategies against the market. This peer group index provides a competitive set of vehicles to benchmark performance, analyse both fund and property-level data, and evaluate intra-year, in-region market indicators.
The APFI is designed to represent the performance of unlisted open-ended pooled real estate funds with an Asia Pacific investment mandate in core assets. The index is based on a sample of four funds with a total net asset value of US$7.2 billion as of June 2021.
Building on the established global methodology and success of MSCI’s pan-European and Americas indexes, the APFI seeks to become the new industry standard, capturing the brisk growth of the pan-Asian, quarterly valued fund market.
“The launch of the index comes as APREA targets transparency as a key area of focus,” says APREA’s Chief Executive Officer, Miss Sigrid Zialcita. It marks a significant milestone in the associations’ mission to enhance transparency in the region’s real assets sector by providing its members with tools and intelligence including reliable benchmark metrics.
Varun Malik, Head of APAC Real Estate Client Coverage at MSCI, said: "As our recent report on the real estate market size shows, the global market continued to grow in the face of disruptive and transformative trends accelerated by the Covid-19 pandemic, underscoring investors' resolute search for returns. We have seen demand for an efficient, transparent tool for benchmarking the performance of asset increases in line with this. We are pleased to collaborate with APREA to launch the APFI, answering investors' needs and empowering them to build better portfolios."
Open-ended pan-regional funds that offer the transparency of quarterly valuation are rare in Asia Pacific. As of December 2020, pan-regional open-end, diversified, core equity (ODCE)-style funds comprised only 4% of unlisted vehicles, or less than 1% of the region’s entire institutional real estate market, according to research by MSCI.
Such funds’ exposures can be substantially different from the overall market, which is far larger and more diverse, creating a challenge for investors looking to gauge the performance of their pan-regional investment vehicles. The limited profile of these funds can lead to a mismatch of risk exposures between such portfolios and broad-market property indexes.
The APFI attempts to address this challenge by providing a focused peer-group benchmark, allowing investors to gauge their diversified fund investments against a competitive basket of funds with similar objectives and capabilities. The new index arrives at a critical time, with more investors turning to pan-regional investment vehicles as they seek to increase their exposure to private real estate and diversify their holdings internationally. According to MSCI’s research, pan-regional, core, open-end funds are long established in the U.S. and are developing rapidly in Europe, but they remain nascent in Asia-Pacific[1].
Formed in 2005, APREA, Asia Pacific’s leading real assets industry association, rebranded this year to reflect its expanded focus on infrastructure assets in addition to real estate. APREA represents over 150 corporations from around the world, including some of the largest REITs, asset managers, property managers, banks/trustees and other industry players.
“The association strives to promote growth in the Asia Pacific real assets sector by advocating for members in policy matters, offering access to cutting-edge research and insights, and connecting members to business opportunities. The APFI is the first of various industry benchmarks which we hope to partner with the MSCI in providing greater transparency in the real estate market, ultimately driving better investment decisions and growth for the overall industry,” noted Miss Zialcita.
MSCI is a leading provider of critical decision support tools and services for the global investment community. With over 50 years of expertise in research, data, and technology, the firm is committed to powering better investment decisions by enabling clients to understand and analyze key drivers of risk and return and confidently build more effective portfolios.
About APREA
Founded in 2005, APREA takes pride in its recognition as a trendsetter in both the developed and developing Asia Pacific markets. As a member of the global Real Estate Equity Securitization Alliance (REESA), APREA brings first-hand international knowledge to its well-established Asia Pacific chapters, where information is analysed and localised. Highly-specialised in the securitised real asset sector, APREA members and intelligence cover all essential segments of REITs, Asset Managers, Property Managers, Banks/Trustees, Legal, Accounting & Tax Specialists, Investors, Developers, Mutual Funds and Consultants.
APREA offers a distinctive global outreach and vision for the Asia Pacific real assets sector, with an aim to create value for our members through the following key focuses:
Anchoring Success
Professional Development
Reach out to industry leaders
Education & Research
Advocacy
Media Contact:
Sigrid Zialcita
CEO
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