European investor outreach with Nareit

By Matthew Fletcher - EPRA Director of European Investor Outreach, Serkan Erol - EPRA Investor Outreach Manager and Meredith Despins - Nareit Senior Vice President, Investment Affairs & Investor Education

At EPRA we hold regular exchanges of knowledge and experience with our sister-associations and recently held a series of investor outreach meetings with Nareit in Europe.
EPRA and Nareit join forces on a number of investor outreach initiatives throughout the year on both sides of the pond and in the Middle East. This year marked the seventh year the EPRA and Nareit investor outreach teams have partnered to meet investors in Europe. These collaborative initiatives present an important opportunity for EPRA and Nareit to leverage the research and industry perspectives of both organisations to deliver a unified and coherent global perspective on the real estate investment proposition through listed real estate equities worldwide. The purpose of the meetings is to promote and represent the listed real estate sector, with the use of actual returns from the FTSE EPRA Nareit Index Series supplemented by empirical and market-based from our respective research banks.
In October, we travelled with Nareit to Zurich, Amsterdam, London, Stockholm and Oslo and in one week met with executive decision makers at 17 investment organisations; including pension schemes, investment consultants, asset managers and sovereign wealth funds. These meetings are opportunities to meet members and non-members, buy side and sell side, including specialist and more generalist investors who may not yet be convinced of the benefits of the listed sector. We tailor each meeting to a different level of knowledge and we prepare to talk across the whole of our geographic listed real estate sectors, highlighting the long-term returns and demonstrating the future opportunities.
Listed real estate has become increasingly representative of the full spectrum of both traditional and previously considered alternative real estate sectors, and interest in the industry has grown. The meetings we have with investors have become more focused on the returns and the dynamics of the sector, with the recent rise of the alternatives. Investors were keen to discuss listed real estate returns relative to other asset classes as shown through CEM Benchmarking research, optimal allocation as shown in the recent Oxford Economics paper, as well as an increasing reference to Environmental, Social and Governance topics. In many cases, the meetings provided a good opportunity to discuss Solvency II in the wake of the new long-term equity risk sub-module which lowers the capital requirements from 39% to 22% for insurance companies’ investment in all publicly traded companies including listed real estate, especially as the regulation is already in effect.
We were pleased to learn there are investors increasing their listed real estate mandates; some, in part, due to the low interest rate environment, and others due to a deeper understanding and belief in the merits of the companies and the sector. We also participated in non-member meetings where the listed real estate discussion had advanced from sector constitution towards how to allocate. There was interest in the recent performance of office sector companies and regular discussion about the increasing number of alternative real estate opportunities available within the FTSE EPRA Nareit universe. Given the strong appetite and growing interest for global listed real estate, we look forward to continuing our joint outreach efforts in the future.