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Index IDEA: Emerging markets real estate up 45% in 2017

Global multi-asset index and analytics provider FTSE Russell and real estate industry experts EPRA and NAREIT recently shared new statistics highlighting the growing scope and strategic importance of global real estate stocks to investors. This comes as FTSE Russell announces its decision to add real estate as the newest standalone Industry in the ICB® classification structure and the FTSE Global All Cap Index, effective January 1, 2019.

According to FTSE Russell analysis:

  • The future ICB Real Estate Industry within the FTSE Global All Cap Index includes approximately 600 securities including REITs, 4% of the index and nearly $2 trillion (USD) of investable market cap as of June 30, 2017.
  • The 3-year correlation of indexes measuring global real estate to that of banks, insurance and financial services companies have roughly halved since the 2007-2011 global financial crisis. 
  • Notably, investor interest in indexes measuring global real estate markets has grown significantly, with emerging markets real estate companies and REITs returning 45% in USD terms in 2017 as of September 8 as measured by the FTSE EPRA/NAREIT Emerging Index.

Source: FTSE Russell. Past performance is no guarantee of future results. Please see the end for important legal disclosures.

Dominique Moerenhout, CEO, European Real Estate Association (EPRA), said:

“The listed real estate industry continues to grow globally as it provides investors stable long-term dividend income streams. FTSE Russell’s elevation of Real Estate as its 11th ICB Industry is timely, as the listed real estate industry is increasingly viewed as an investment asset class in its own right.”

Michael Grupe, executive vice president, research & investor outreach, National Association of Real Estate Investment Trusts (NAREIT), said:

“As evidenced by relatively low correlations of returns with other assets in the global opportunity set, listed real estate is widely viewed by investors as a diversifying asset class, separate from the financial sector that includes banks and insurance companies. Investors distinguish listed real estate from other equities to develop more refined portfolio analysis and more efficient portfolio allocations.” 

Catherine Yoshimoto, senior product manager, FTSE Russell, said:

“The global real estate sector has clearly grown in scope and investor interest in recent years, while becoming less correlated with the rest of the financial services industry. These trends helped drive our decision to create a separate headline industry for this asset class for investors.” 

For more information on FTSE Russell’s planned enhancements to its Industry Classification Benchmark (ICB) following a recent market consultation or on the FTSE EPRA/NAREIT Global Real Estate Index Series, go to the FTSE Russell website.


© 2017 London Stock Exchange Group plc and its applicable group undertakings (the “LSE Group”). The LSE Group includes (1) FTSE International Limited (“FTSE”), (2) Frank Russell Company (“Russell”), (3) FTSE TMX Global Debt Capital Markets Inc. and FTSE TMX Global Debt Capital Markets Limited (together, “FTSE TMX”) and (4) MTSNext Limited (“MTSNext”). All rights reserved. 

FTSE Russell® is a trading name of FTSE, Russell, FTSE TMX and MTS Next Limited. “FTSE®”, “Russell®”, “FTSE Russell®” “MTS®”, “FTSE TMX®”, “FTSE4Good®” and “ICB®” and all other trademarks and service marks used herein (whether registered or unregistered) are trade marks and/or service marks owned or licensed by the applicable member of the LSE Group or their respective licensors and are owned, or used under licence, by FTSE, Russell, MTSNext, or FTSE TMX. 

All information is provided for information purposes only. Every effort is made to ensure that all information given in this publication is accurate, but no responsibility or liability can be accepted by any member of the LSE Group nor their respective directors, officers, employees, partners or licensors for any errors or for any loss from use of this publication or any of the information or data contained herein.

Views expressed by Dominique Moerenhout, Michael Grupe and Catherine Yoshimoto are as of September 15th and subject to change. These views do not necessarily reflect the opinion of FTSE Russell or the LSE Group.

No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE Russell Indexes or the fitness or suitability of the indexes for any particular purpose to which they might be put.

No member of the LSE Group nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing in this IDEA should be taken as constituting financial or investment advice. No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any representation regarding the advisability of investing in any asset. A decision to invest in any such asset should not be made in reliance on any information herein. Indexes cannot be invested in directly. Inclusion of an asset in an index is not a recommendation to buy, sell or hold that asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.

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Past performance is no guarantee of future results. Charts and graphs are provided for illustrative purposes only. Index returns shown may not represent the results of the actual trading of investable assets. Certain returns shown may reflect back-tested performance. All performance presented prior to the index inception date is back-tested performance. Back-tested performance is not actual performance, but is hypothetical. The back-test calculations are based on the same methodology that was in effect when the index was officially launched. However, back- tested data may reflect the application of the index methodology with the benefit of hindsight, and the historic calculations of an index may change from month to month based on revisions to the underlying economic data used in the calculation of the index.

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