MCSI Announces a New Global Property Index

MCSI announced its new MSCI Global Quarterly Property Index, or GQPI. The company claims the index is the first that will “track the property-level performance of quarterly-valued assets across the world’s major real estate markets.” The intent of the index is to help investors “monitor and manage international portfolios, particularly in the context of the growing  headwinds of geopolitical tensions and the associated rising inflation and interest rates.”

There are existing indexes, including a number that MCSI already produces. The difference with this one, according to the company, is scope and depth.

Separately, MCSI launched the Europe Quarterly Property Index (EQPI), tracking more than 12,000 properties across 20 countries.

In addition to the company’s annual and biannual indexes, the two new ones are intended to help investors better understand market cycles and market differentials for multi-asset class analysis and resource allocations.

GQPI monitors 20,000 property investments across 26 countries. For 17 of the countries, this will be the first time there is available quarterly valued property asset data, MSCI claims. There are also “regional and global aggregates using MSCI’s market size reweighting methodology.” The index history extends back to 2007. It is already providing information on existing performance.

“The recent performance of the assets that make up GQPI shows that global real estate returns accelerated to 17.8% on a 12-month rolling basis in the first quarter of 2022,” MSCI wrote. “While still strong in comparison to their historical context, the 3-month rate of return of 4.4% decelerated from the record high 5% rate in Q4 2021, which had coincided with a market bounce back from COVID-19 weakness.”

The only regions that saw improved returns on a three-month basis in the first quarter were Central and Eastern Europe, the Nordic countries, and Germany.

“Until now, investors only had access to quarterly property-level indexes for a few of the larger, more transparent markets, but the ongoing economic environment and market conditions as we come out of the pandemic have made clear the importance of timely property-level indicators to understand how real estate markets are responding,” the release quoted MSCI global head of real assets, Rene Veerman, as saying. “Whilst MSCI’s existing range of indexes in these markets provide deep and granular data on longer-term returns and drivers, these new quarterly indexes provide more comprehensive and regular performance data for a more precise reflection of risk in Global and European markets, which often have lower frequency valuation practices across market participants.”