Thomson Reuters, a leading business intelligence and media firm, has teamed up with Global Property Research (GPR) and Asia Pacific Real Estate Association (APREA) to launch two new investable real estate indices that are a part of its larger composite family launched in January 2013.
A composite comprises of indices, equities and other factors that help measure the performance of a market on the whole. While a composite is a broader term, an index is a micro term.
Reuters first debuted into the composite market earlier this year when it launched the TR/GPR/APREA. The composite covers 13 countries and many Asian Real Estate Investment Trusts (REITs). The composite is based on "the total return of Asia Pacific property stocks, weighted by free-float market capitalization, in a way that represents the return characteristics of the overall Asia Pacific property stock sector."
The two new investable indices are a part of the aforementioned composite family. Titled "The Thomson Reuters GPR/APREA Investable 100 and Investable REIT 100 indices," the benchmarks have been developed with affluent investors of the Asia Pacific market.
What makes these indices different from the others?
The indices will be maintained by a committee of market experts but will independently be implemented by Reuters. Moreover, the indices will have same rules for both emerging and strongly performing areas.
"With continued interest in Asia Pacific Real Estate index products for bench-marking and investment product development, we are delighted to strengthen our collaboration with GPR and APREA. Our first release has already been very well received and we are confident that the new investable indices reflect the holdings of many Asia Pacific property investors," Jason du Preez, head of indices at Thomson Reuters, said in a statement.
"The launch of the TR/GPR/APREA Investable Indices marks another milestone in our quest to provide robust benchmarking tools for the industry. Passive funds can invest in the indices, representing the top 100 property companies and top 100 REITs respectively in Asia Pacific, and active funds can demonstrate their value add through selecting stocks that outperform the particular index," Lim Swe Guan, Chairman of APREA added in the statement.
The launching of these indices couldn't have come at a better time. Real estate market growth in the Asia Pacific region is tremendous. In a recent study conducted by APREA, it was found that by 2031, 50 percent of the global real estate market share will belong to the Asia Pacific region. Its current market share is around 27 percent, which is estimated to go up to 39 percent by 2021.