Investors will soon be able to track the performance of the world’s emerging real estate markets using the leading global real estate benchmark, the FTSE EPRA/NAREIT Global Real Estate Index Series, which is set to extend its coverage with new indices encompassing listed property stocks from these dynamic economies.
“The huge demand for real estate investment in the fast-growing emerging market countries has propelled the sector onto the radar screen of investors as one of the more interesting investment asset classes of the future. With the planned launch of the FTSE EPRA/NAREIT Emerging Markets Index Series, those investors will soon have the tools to accurately track the development of these markets for the first time,” Mark Makepeace, Chief Executive of the FTSE Group commented.
He was speaking at the European Public Real Estate Association’s (EPRA) 2008 annual conference in Stockholm.
Economic growth and population size are the two main driving forces for real estate markets. With 80% of the world’s inhabitants living in developing countries, listed real estate companies in these areas have attracted strong interest from the investment community, providing the impetus for the creation of the Emerging Markets Index Series. The new indices will expand the existing FTSE EPRA/NAREIT Global Real Estate Index Series.
“We believe that REITs and other listed real estate will take-off in emerging markets as they have in most of the major developed countries, because of the overwhelming economic and financial benefits of their structures,” EPRA Chief Executive Philip Charls said.
The methodology for the Emerging Markets indices has been developed by FTSE, in conjunction with EPRA and NAREIT. Similar to the existing Developed Market real estate indices, criteria for inclusion in the Emerging Markets Index Series will include minimum free float market capitalisation, liquidity and EBITDA contribution from relevant real estate activities. Constituents must also publish an audited annual report in English.
“The Emerging Markets Index Series is an important step in our ongoing effort to provide investors with access to the entire opportunity set of global real estate investment using the efficiency of publicly traded real estate securities,” said Steven A. Wechsler, President and CEO of NAREIT, the National Association of Real Estate Investment Trusts.
