The Asian Association for Investors in Non-Listed Real Estate Vehicles (ANREV) has released its latest study on fee and cost structures of non-listed real estate funds in Asia-Pacific, as part of its efforts to enhance transparency on fees for investors.
According to the study, the average total global expense ratio (TGER) for non-listed real estate funds in the region stands at 1.12%, with notable variations across various vehicle characteristics such as vehicle style, structure or size.
The TGER, which measures the costs associated with managing an investment fund relative to the asset value, facilitates comparison of fees and costs between real estate investment vehicles.
This year’s study includes 57 non-listed real estate funds that provided information on their general fees and terms, including 42 which submitted their 2021 TGERs. These vehicles are managed by 24 managers and collectively represent a total gross asset value (GAV) of nearly US$96.8 billion at the end of 2021.
The latest findings reveal that core funds posted an average TGER based on GAV of 0.86%, compared with 1.57% and 1.31% for value- added funds and opportunity funds respectively.
By structure, open-end funds posted an average TGER of 1.11% while closed-end funds reported 1.13%. Larger vehicles (over US$1 billion in GAV) recorded a lower TGER based on GAV of 0.95%, compared with 1.30% from smaller vehicles, or those with less than US$1 billion in GAV.
Funds that follow a single-country strategy posted a lower average TGER on GAV of 1.09%, than their multi-country peers which recorded 1.16%. Australia single-country funds had an average TGER on GAV of 0.81%, the lowest of all single-country funds.
The ANREV survey, launched in 2011, is published on a biannual basis.