FTSE EPRA Nareit Global Real Estate Index Series: Ground Rule Update
24 June 2021
FTSE Russell would like to inform clients of the following updates to the FTSE EPRA Nareit Global RealEstate Index Series Ground Rules which includes changes resulting from the FTSE EPRA Nareit Global
Real Estate Index Series Nationality and Regional Representation Consultation.The changes are effective
immediately.

4.0

Eligibility Criteria (addition in bold)

4.3

A. The Initial Universe of companies consists of companies with the following ICB
Classifications: Supersector 8600 (Real Estate) (New ICB Real Estate Industry 35) andSubsector 3728 (Home Construction) (New ICB Home Construction Sector 40202010). The
universe may also include companies with a New ICB Subsector of 30204000(Closed End Investments) if the majority of revenue is derived from Real Estate
activities.

4.7

Revenue must be reported in such a way that revenue from ineligible activities can beexcluded. The following are not considered relevant real estate activities:
A.

The financing of real estate.

B.

The provision of construction management, general contracting and project management
services.

C.

The provision of property management, facilities management, insurance, power supply,brokerage, investment management funds and services. See Appendix 7 for more
information.

D.

Holding companies are excluded from the index. Holding companies are defined ascompanies that have more than 50 percent of their net assets invested in the securities ofother listed companies.

E.

Storage caverns/units for commodities such as oil & gas. Revenue derived from retail fuelstations is considered eligible.

F.

Companies for which the ownership of real property is incidental to the primary revenue
generating activities, including those companies in the gaming, theme park and otherentertainment businesses.

G.

Infrastructure assets, including transportation assets (roads, bridges, tunnels, airports,etc.), energy and utilities assets (power generation, fuels, etc.), water and waste
management assets and communication assets (line-based networks, air-based networks,etc.) and prisons.

H.

Timberland and farmland.

I.

Outdoor advertising.

J.

Data center revenues labelled colocation or interconnection will be considered eligible realestate revenues for the purpose of the EBITDA screen.

K.

Revenue from parking lots and parking services are not considered relevant real estateactivities unless such revenues are incidental to real estate activities otherwise consideredrelevant.

4.9.2

A prospective constituent, which would otherwise have been assigned a nationality of a
Developed market, that has over each of the previous two years derived less than 75% of its
total annual EBITDA from Developed markets (as classified by FTSE Russell) will instead be
assigned the nationality of the Emerging market (as classified by FTSE Russell) from which it has
derived the greatest percentage of its EBITDA over those two years. If the company's annual
report provides insufficient detail to allow a clear determination of the geographic
breakdown of the company's EBITDA, then the preceding calculation will be based uponassets or revenue as appropriate. If the annual report provides insufficient detail toallow a clear determination using EBITDA, assets, or revenue, then the company will
not be eligible for the Developed Index due to inadequate reporting.
Prospective constituents that have only one year of audited financial statements in their latest
annual report (as defined by Rule 4.8A) or English IPO prospectus will be reviewed and classified
based on the most recent available one year audited financial statements.

4.9.3

An existing constituent which has previously been assigned a nationality of a Developed market
that has over each of the previous two years derived less than 50% of its total annual EBITDA
from Developed markets (as classified by FTSE Russell) will be assigned the nationality of theEmerging market from which it has derived the greatest percentage of its EBITDA over those twoyears. If the company's annual report provides insufficient detail to allow a clear
determination of the geographic breakdown of the company's EBITDA, then thepreceding calculation will be based upon assets or revenue as appropriate. If theannual report provides insufficient detail to allow a clear determination using EBITDA,
assets, or revenue, then the company will not be eligible for the Developed Index due
to inadequate reporting.

4.9.4

A constituent whose Emerging market nationality was determined by the application of Rules
4.9.2 or 4.9.3 above may have its nationality changed to that of a different Emerging market iffor two consecutive years the greatest percentage of its EBITDA is derived from that Emergingmarket.

4.9.5

A constituent whose Emerging market nationality was determined by the application of Rules
4.9.2 or 4.9.3 above may have its nationality changed to that assigned in the FTSE Global Equity
Index Series if for two consecutive years the company derives more than 75% of its EBITDA fromDeveloped markets.

5.4

Additions to the Index Series (update in bold – Developed Markets Asia Stocks
threshold changed from 0.30% to 0.10% to align with other Developed Markets)
At the quarterly review, non-constituent securities that have an investable market capitalisation(after the application of investability weightings) equal to or greater than the following basis
points of their respective regional index will be eligible for index inclusion:Developed Marketsa) Asian Stocks

0.10%b) EMEA Stocks

0.10%c)0.10%

Americas Stocks

Emerging Marketsa) Asian Stocks

0.20%b) EMEA Stocks

0.30%c)0.30%

Americas Stocks

AIM Marketa) AIM Stocks

1.50%

Prospective additions must also have at least 50% of their total assets invested in real estate at
the time of entering the index.
5.5Deletions from the Index Series (update in bold – Developed Markets Asia Stocks
threshold changed from 0.15% to 0.05% to align with other Developed Markets)
At the quarterly review, an existing constituent of the FTSE EPRA Nareit Global Real Estate IndexSeries is deleted from the Index Series if it has an investable market capitalisation (after theapplication of investability weightings) of less than the following basis points in their respective
region:Developed Marketsa) Asian Stocks

0.05%b) EMEA Stocks

0.05%c)0.05%

Americas Stocks

Emerging Marketsa) Asian Stocks

0.10%b) EMEA Stocks

0.15%c)0.15%

Americas Stocks

AIM Marketa) AIM Stocks

0.75%

6.2

Fast Entry Level (update in bold)

6.2.1

A new issue that has an investable market capitalisation (after the application of any investabilityweightings) equal to or greater than the following basis points for its respective region will be
included in the FTSE EPRA Nareit Global Real Estate Index Series after the close of business on
the fifth day of trading. Eligibility will be determined using the closing price on the first day oftrading. In the event of the fifth day of trading occurring during the week of the index
review, an eligible fast entrant will be added to the index concurrent with the review
effective date.

An updated copy of the FTSE EPRA Nareit Global Real Estate Index Series Ground Rules (Version 10.4) is
now available on the FTSE Russell website: http://www.ftserussell.com

For further information please contact FTSE Russell Client Services at info@ftserussell.com or call:Australia
Hong KongJapanLondon
New York+1800 653 680+852 2164 3333
+81 3 4563 6346
+44 (0) 20 7866 1810
+1866 551 0617

Alternatively please visit our website at www.ftserussell.com

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