Fri, 11/04/2014 - 12:22
INREV, the European Association for Investors in Non-listed Real Estate Vehicles, has launched new industry guidelines at its annual conference in Berlin.
The revised INREV Guidelines are the result of a full-scale review, the first since the original set of guidelines were developed in 2005 and formally integrated in 2008, before the onset of the financial crisis.
The review process included 18 months of industry consultation and engagement with over 300 industry players and organisations across three continents.
As a result, a number of substantive changes have been made particularly in the areas of corporate governance, liquidity and reporting. Taken together, it is expected that these updates will increase transparency in the non-listed real estate sector, driving further possibilities for benchmarking and performance analysis.
Structurally, the guidelines have been completely overhauled to become more accessible and user-friendly. In its new online format the guidelines tool is organised into modules so that content can be easily referred to and implemented by individual organisations. Separate modules can now be reviewed and new ones added at any time, meaning that guidance can quickly be updated in response to market or industry changes.
Lonneke Löwik, INREV’s director of professional standards, says: “We have now been through a full financial cycle since the guidelines were first formalised and in that time we have seen increased industry demand for information and reporting. It 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. Our intention is for the revised guidelines to be a dynamic tool so that, together with our members, we can further improve transparency and professionalism across the sector.”
Some of the key updates in the INREV Guidelines 2014 focus on:
• Corporate governance – the Guidelines acknowledge and reference AIFMD where needed;
• Frequency and level of disclosure of reporting – the guidance around this topic has been increased; -Liquidity – the Guidelines have been extended to cover issues, redemptions, fund wind-ups and extensions;
• Compliance – the Guidelines include an adoption and compliance framework to help managers and investors assess and understand Guidelines compliance;
• Greater tailoring of the guidelines to reflect different structures such as open end funds, joint ventures and club deals.
Neil Harris, head of asset management for real estate in Europe for GIC and INREV Management Board and Guidelines Steering Group member, says: “The new Guidelines mark a significant step forward for the non-listed real estate sector. Stronger 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. As 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."
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