IPD Index Announcement: 2009 Index Research and Development Review

February 2010: IPD indices only move at the pace of underlying local valuation practices, cultures and assumptions, mediated through widely varying leasing models. It is for these reasons that IPD continues to work with investment market participants and organisations to research the underlying valuation and leasing drivers of income and capital movements.

If valuations are ‘behind the curve’ then individual portfolio results, IPD’s headline indices and all related benchmarks will also similarly suffer some lag. If the IPD market indices do not truly reflect the real estate investment market then that market cannot be fairly judged against other asset classes and if the benchmarks are not consistent then comparisons of portfolio performance may reflect value uncertainty as well as relative performance.

IPD has always accepted a broad responsibility to research the inputs to indices, refine their computation methods and enhance the outputs. In 2009, seven separate research and index development projects, each closely related to the investment issues raised in the context of unprecedented cyclical volatility, have been undertaken by IPD and our partners. The purpose of the report – the first in a proposed annual series – is to summarise all of the work done by IPD and its
research partners during 2009 which sheds light upon the quality of the inputs to and methods of IPD’s headline market indices in each of the following areas.

European Valuation Accuracy Research

UK Valuer Synchronisation Studies
Exploratory Development of Transaction Based Indices
UK Lease Duration and Income Security Studies
Pan-European Investor Indices and Benchmarks
Index Methods for Non-Synchronised Valuation Regimes

source :IPD