Real Estate Performance by Strategy – December 2015

by Ciantelle Lawrence

  • 14 Dec 2015
  • RE

The PrEQIn Real Estate Index uses quarterly cash flow transactions and net asset values (NAV) from over 1,500 private equity real estate funds detailed on Preqin’s Real Estate Online service. The Index provides insight into the performance of the real estate asset class with indices split into the following strategies – value added, opportunistic and real estate debt. The PrEQIn All Private Equity Strategies and All Real Estate indices feature on the chart below in order to depict performance relative to broader private equity strategies and enable further comparison. All of the indices have been rebased to 100 as at 31 December 2007.

Since December 2007, real estate debt has consistently outperformed value added and opportunistic strategies. As of June 2015, the PrEQIn Real Estate Debt Index stands at 109.5, 24 points higher than the PrEQIn Opportunistic Index and 33 points higher than the PrEQIn Value Added Index. Additionally, real estate debt is the only strategy to surpass its pre-crisis peak of 104.4 in March 2008, achieving this in March 2015. Comparatively, private equity recovered from the financial crisis at much faster rate than the real estate asset class. This is shown in the chart above by the PrEQIn All Private Equity Strategies Index, which exceeded its pre-crisis performance levels in Q4 2011.

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