Industry associations agree to global standard on fees and costs

Non-listed real estate associations INREV, NCREIF, PREA and ANREV have reached unanimous agreement on a standardised approach for measuring the total fees and costs of real estate investment vehicles, enabling investors and managers to compare vehicles across different regions.

The new Total Global Expense Ratio (TGER) was agreed following industry-wide consultation. It has been incorporated into the NCREIF PREA Reporting Standards and after a one-year transitional period will become part of the INREV Guidelines, which are also adopted by ANREV in Asia Pacific.

The new ratio builds on the original INREV Total Expense Ratio (TER) and the Reporting Standards Real Estate Fees and Expense Ratio (REFER) and will greatly enhance the ability of investors and managers to compare fee structures across their non-listed real estate vehicles and investment portfolios, regardless of the regional domicile of these investments. It will also provide an additional mechanism for cost analysis and comparison with industry averages, helping to improve investment decision-making.

Utilising the Global Definitions Database, TGER bridges gaps in terminology and definitions for the most widely used categories of vehicle fees and costs, adding a further layer of transparency and consistency for investors and managers.

Guido Verhoef, head of private real estate at PGGM and co-chair of the Global Standards Steering Committee, said: ‘TGER is a tremendous step forward for the industry as a whole. It is evolution rather than revolution, but evolution that, particularly in this era of ever-increasing cross-border capital flows and rising cost consciousness, delivers great benefits in terms of enhanced cost transparency.  TGER also drives closer alignment between investors and managers and significant enhancements to consistency and comparability.  This is an initiative about which the entire industry should be really excited.’  

John Caruso, global head of fund finance at Nuveen Real Estate and co-chair of the Global Standards Steering Committee, added: ‘Finally, investors have the ability to easily compare fees and expenses across funds, which is a major consideration in making an investment decision.  TGER truly levels the playing field both domestically and internationally by providing a standard methodology for investment managers to follow as well as providing investors an additional measure to use when comparing investment alternatives.  The SSC and all of the volunteers involved are excited about this first true global standard.'


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