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Index IDEA: What’s behind the surge in emerging markets real estate indexes in 2017?

The FTSE EPRA/NAREIT Emerging Index, which measures the performance of listed real estate companies and REITs in Emerging markets, has risen 15.8% in 2017 and 3% in April as of April 24. This increase is greater than other indexes from the FTSE EPRA/NAREIT Global Real Estate Index Series® representing Developed, Developed Europe and Eurozone markets.

Experts from the European Public Real Estate Association (EPRA) and FTSE Russell offer insights on what factors may be driving these comparative index returns year-to-date and what market participants should look for in an index measuring listed real estate companies and REITs.

Ali Zaidi, director Research & Indices, European Public Real Estate Association, said:

“Year-to-date, the FTSE EPRA/NAREIT Global Real Estate Index Series demonstrates that listed real estate companies and REITs in emerging countries have outperformed those in Developed countries, which tend to have a higher proportion of property owners focused on managing and leasing properties. Dividends played a substantial role in supporting performance of Emerging countries where REITs represent a significant portion of total real estate, such as South Africa and Mexico. On the other hand, in Emerging countries where the real estate market is primarily focused on property development, such as China, Malaysia and Brazil, price return continued to support the index returns.”

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

"Market participants can use the country and regional indexes within the FTSE EPRA/NAREIT Global Real Estate Index Series to better understand performance nuances of different property markets, whether Developed, Emerging or both."

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The FTSE EPRA/NAREIT Global Real Estate Index Series® is calculated by FTSE in association with EPRA and NAREIT. EPRA® is a trade mark of European Public Real Estate Association (“Partner”). NAREIT® is a trade mark of National Association of Real Estate Investment Trusts (“Partner”). All rights in and to the FTSE EPRA/NAREIT Global Real Estate Index Series (“Index”) vest in FTSE and/or its relevant Partner(s).

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 Ali Zaidi of EPRA and Catherine Yoshimoto of FTSE Russell are as of April24th 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 EPRA/NAREIT Global Real Estate Index Series® or the fitness or suitability of the FTSE EPRA/NAREIT Global Real Estate Index Series® 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.

No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the applicable member of the LSE Group. Use and distribution of the LSE Group index data and the use of their data to create financial products require a licence from FTSE, Russell, FTSE TMX, MTSNext and/or their respective licensors.

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.

This publication may contain forward-looking statements. These are based upon a number of assumptions concerning future conditions that ultimately may prove to be inaccurate. Such forward-looking statements are subject to risks and uncertainties and may be affected by various factors that may cause actual results to differ materially from those in the forward-looking statements. Any forward-looking statements speak only as of the date they are made and no member of the LSE Group nor their licensors assume any duty to and do not undertake to update forward-looking statements.

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