GREFI All Funds Index Steady in Third Quarter; US Performance Lags
CHICAGO, IL, January 16, 2018 – The National Council of Real Estate Investment Fiduciaries (NCREIF) in collaboration with the European Association for Investors in Non-Listed Real Estate Vehicles (INREV), and the Asian Association for Investors in Non-Listed Real Estate Vehicles (ANREV) has released third quarter 2017 results for the Global Real Estate Fund Index (GREFI). The GREFI represents an integration of data from these three member-driven, non-profit organizations and aims to meet the data collection and information needs of the expanding global activities of our combined membership.
The GREFI consists of 521 funds as of third quarter 2017 with total gross asset value (GAV) of $691.0 billion. Europe represents the largest count of funds, at 321, compared to 96 in Asia Pacific, 90 in the US, and 14 funds with a global strategy. The US accounts for the largest share of GREFI GAV, at $307.7 billion, or 45%, followed by Europe with $238.4 billion, or 35%, and Asia Pacific with $121.8 billion, or 18%.
Annual GREFI Total Returns by Region
In the third quarter 2017, the GREFI returned 2.17%, compared to 2.15% last quarter and 1.70% in the third quarter 2016. Asia Pacific remains the strongest performer with a 2.70% total quarterly return, compared to 2.25% for Europe and 1.98% for the US. Funds with a global strategy had a 1.03% total return for the quarter.
Over the trailing year, annual GREFI total returns were 8.83%, compared 8.58% for the year ending third quarter 2016. By region, annual total returns were 11.80% for Asia Pacific, 9.39% for Europe, and 7.69% for the US. The Asia Pacific region has maintained its lead for trailing year total returns since second quarter 2016.
Annual GREFI Total Returns by Style
By style, core funds represent 63% of the GREFI fund count, at 330, and 78% of GAV, at $538.0 billion. Thus, core fund returns tend to track the GREFI All Funds Index. In the third quarter, core funds returned 2.04%, compared to 2.76% for non-core funds, which include both value-add and opportunistic strategies. On a trailing year basis, non-core funds continued to lead performance with a 11.21% total return, compared to 8.30% for core funds.