Real estate industry agrees global standard on fees

The four major global real estate associations have agreed on a standardised approach for measuring the total fees and costs of real estate investment vehicles within different regions.

The Total Global Expense Ratio (TGER), which has been developed by the European Association for Investors in Non-Listed Real Estate Vehicles, National Council of Real Estate Investment Fiduciaries (NCREIF), Pension Real Estate Association (PREA) and the Asian Association for Investors in Non-Listed Real Estate Vehicles, builds on the original INREV Total Expense Ratio (TER) and the Reporting Standards Real Estate Fees and Expense Ratio (REFER).

The industry hopes to enhance investors’ ability to compare fee structures across their non-listed real estate vehicles and investment portfolios, regardless of the regional domicile of these investments.

“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,” said Guido Verhoef, head of private real estate at PGGM and co-chair of the Global Standards Steering Committee.

“TGER also drives closer alignment between investors and managers and significant enhancements to consistency and comparability,” he said.