PrEQIn Real Estate Index: Real Estate Performance by Strategy – May 2014

by Vasilisa Starodubtseva

  • 15 May 2014
  • RE

The PrEQIn Real Estate Index depicts the average returns earned by investors within their private real estate portfolios, based on the actual amount of money invested in private real estate partnerships to give an indication of the performance since a defined point in time.

While comparing the PrEQIn Real Estate Index to the PrEQIn All Private Equity Index, it is evident that the returns of the two are largely similar from 2010 onwards, with the PrEQIn Real Estate Index standing at 188.6 and the PrEQIn  All Private Equity Index standing at 187.9 as of December 2010. For comparison, the S&P 500 Index was standing at 95.3 in the same time period.  Although the index returns have since been seen to increase, with the PrEQIn Real Estate Index standing at 245.7 and the PrEQIn All Private Equity standing at 251.0 as of September 2013, these returns are considerably lower than the pre-crisis figures reported at 337.0 and 190.5 respectively, as of June 2007. This indicates that while real estate funds are recovering, they are yet to reach their pre-crisis levels.

In analyzing the PrEQIn Real Estate Index by fund strategy, over the 2007-2013 time period, the Real Estate Debt Index has consistently outperformed both the Opportunistic and Value Added Indices, standing at 85.0, 69.0 and 58.9 respectively as of September 2013. Comparatively, the Real Estate Debt Index stood at 104.4 as of March 2008, the highest return figure achieved within the time period, while the Value Added Index stood at 103.1 and the Opportunistic Index stood at 97.8. 

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