MSCI Global
Methodology
Standards for Real
Estate Investment
Document Author

November 2023

NOVEMBER 2023

MSCI Global Methodology Standards for Real Estate Investment | November 2023

Contents

1

Introduction ......................................................................................................... 3

2

Methodology Sets ............................................................................................... 4

3

Methodology Documents ................................................................................... 5

4

5

3.1

MSCI Real Estate - Index Policies ............................................................... 5

3.2

MSCI Global Data Standards for Real Estate Investment ......................... 5

3.3

MSCI Property Indexes Methodology ......................................................... 5

3.4

MSCI Standards for Real Estate Valuations............................................... 5

3.5

MSCI Property Fund Indexes Methodology ............................................... 5

3.6

MSCI/AREF UK Quarterly Property Fund Index .......................................... 6

3.7

MSCI Real Estate – BMR Benchmarks Methodology Specifications ....... 6

MSCI Private Real Estate Index Naming Conventions ..................................... 7
4.1

MSCI Private Real Estate Standard Index Name ....................................... 7

4.2

MSCI Private Real Estate Index Subset ...................................................... 8

4.3

MSCI Private Real Estate Index Series ....................................................... 9

APPENDIX: Versioning Table ........................................................................... 11© 2023 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

MSCI.COM | PAGE 2 OF 13

MSCI Global Methodology Standards for Real Estate Investment | November 2023

1

Introduction
MSCI provides a wide variety of Private Real Estate Indexes, which are governed byrules-based methodologies.
Methodology documents outline index objectives and describe the rules andguidelines followed by MSCI to create and maintain the MSCI Private Real Estate
Indexes in the widest set of possible circumstances, including situations of market
stress. MSCI’s rules-based private real estate index methodologies are designed toensure that indexes are determined with integrity, and that discretion with respect tomethodology is only used in unusual cases not effectively addressed by themethodologies.
This document outlines the list of various published MSCI Private Real Estate Index
methodology documents, which are available on MSCI’s website atwww.msci.com/real-estate-methodology. This document also covers the naming
convention applied to MSCI Private Real Estate Indexes which corresponds to themethodology used for an index.

© 2023 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

MSCI.COM | PAGE 3 OF 13

MSCI Global Methodology Standards for Real Estate Investment | November 2023

2

Methodology Sets
MSCI Private Real Estate Indexes are governed by a set of methodology documents(Methodology Set) which define the full methodology governing a specific index.
The Methodology Set for all MSCI Private Real Estate Indexes includes:•

MSCI Real Estate - Index Policies•

MSCI Global Data Standards for Real Estate Investment

For a Property Index, the Methodology Set additionally includes:•

MSCI Property Indexes Methodology•

MSCI Standards for Real Estate Valuations•

Additional methodology specifications, as appropriate to the market or index.

For a Property Fund Index, the Methodology Set additionally includes:•

MSCI Property Fund Indexes Methodology•

Additional methodology specifications, as appropriate to the market or index, forexample, MSCI/AREF UK Quarterly Property Fund Index Methodology.

For BMR Benchmarks1, the Methodology Set includes the Property Index
Methodology Set or Property Fund Index Methodology Set, as applicable, together
with the MSCI Real Estate – BMR Benchmarks Methodology Specifications
document, which describes any additional methodology specifications anddocuments for the BMR Benchmarks.

1 A “BMR Benchmark” is an MSCI Private Real Estate Index for which MSCI Limited has provided written

permission in each instance to its client to be used for a BMR regulated use.

© 2023 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

MSCI.COM | PAGE 4 OF 13

MSCI Global Methodology Standards for Real Estate Investment | November 2023

3

Methodology Documents

3.1

MSCI REAL ESTATE - INDEX POLICIESThe MSCI Real Estate – Index Policies document is part of each Methodology Set
and sets out the development and maintenance for the MSCI Private Real Estate
Indexes, including Index Design Guidelines and key index policies.

3.2

MSCI GLOBAL DATA STANDARDS FOR REAL ESTATE INVESTMENT
The MSCI Global Data Standards for Real Estate Investment document defines thedata fields collected from clients. The document provides background to the Data
Standards, explaining its purpose, benefits and structure and includes appendiceslisting all fields, enumerations, definitions and data formats.

3.3

MSCI PROPERTY INDEXES METHODOLOGY
The MSCI Property Indexes Methodology document outlines how MSCI creates andmaintains its Property Indexes, market information and analytics, which are designed
to address the needs of real estate and multi-asset class investors.
MSCI’s Property Indexes measure the performance of global, regional and individual
national markets and segments by calculating and aggregating the performance ofindividual properties.

3.4

MSCI STANDARDS FOR REAL ESTATE VALUATIONSThe standards for the asset level valuations used in the MSCI Property Indexes areprovided in the MSCI Standards for Real Estate Valuations document.
For most financial asset classes, investment performance measurement is based
upon transaction prices. The relatively low liquidity of private real estate investments
renders the establishment of purely price-based property indexes problematic. As aresult, the MSCI Property Indexes are predominantly constructed from professional
valuations.

3.5

MSCI PROPERTY FUND INDEXES METHODOLOGY
The MSCI Property Fund Indexes Methodology document outlines how MSCI createsand maintains its Property Fund Indexes and market information, which are designed
to address the needs of real estate and multi-asset class investors.

© 2023 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

MSCI.COM | PAGE 5 OF 13

MSCI Global Methodology Standards for Real Estate Investment | November 2023

The objective of MSCI Property Fund Indexes is to measure the performance ofunlisted pooled structures, including the effects of cash holdings, leverage and fundoperating costs, as well as the returns to the underlying real estate assets.

3.6

MARKET SPECIFIC PROPERTY FUND INDEX METHODOLOGYDOCUMENTS
The Market Specific Methodology Documents provide details on the specificmethodology for the respective Property Fund Index and includes, among otherthings, the index inclusion requirements, the definition of the sub-indexes and data
provision requirements. The methodology books are available on the Real Estate
Methodology Documents section on the MSCI website.
The section includes among other market specific document the MSCI/AREF UK
Quarterly Property Fund Index Methodology. The MSCI/AREF UK Quarterly Property
Fund Index is designed to represent the performance of UK unlisted pooled property
funds. The Index is value-weighted, and it is based on the Net Asset Value (NAV) of
its constituent property funds each quarter.

3.7

MSCI REAL ESTATE – BMR BENCHMARKS METHODOLOGY
SPECIFICATIONSThe MSCI Real Estate – BMR Benchmarks Methodology Specifications document
sets out the additional detailed methodology specifications for BMR Benchmarks.
A “BMR Benchmark” is an MSCI Private Real Estate Index for which MSCI Limited has
provided written permission in each instance to its client to be used for a BMR
regulated use. A BMR Benchmark may be a Standard Index or an index automaticallycalculated from a Standard Index using pre-configured specifications.

© 2023 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

MSCI.COM | PAGE 6 OF 13

MSCI Global Methodology Standards for Real Estate Investment | November 2023

4

MSCI Private Real Estate Index Naming Conventions
The name of an MSCI Private Real Estate Index series may comprise of up to threecomponents. The first component is the name of the Standard Index upon which thespecific index is based. The second component describes any selection filter thathas been applied to a Standard Index in creating a sub-index. The third component
indicates the actual index series that is calculated and includes among other things
the measure, based on the methodology as defined in the respective methodology
book for the Standard Index.
Using this approach, each name is unique and descriptive. In exceptional
circumstances, if a name becomes too long due to the complexity of its definition,
MSCI may decide to create an alternative unique name which is shorter. In this caseits description will be more fully detailed in a custom methodology document.

4.1

MSCI PRIVATE REAL ESTATE STANDARD INDEX NAMEThe Standard Index name indicates the national market or multinational region whichit covers, the reporting frequency and the primary methodology. A Standard Index
may be labeled MSCI or it may be co-branded. It does not reference any additional
filters relating to the index scope.
Indexes based on the MSCI Property Indexes Methodology are named “Property
Indexes” while those based on the MSCI Property Fund Indexes Methodology are
named “Property Fund Indexes.”
The frequency normally reflects the minimum required data provision regime for an
index – monthly, quarterly, bi-annual or annual. In certain markets, however, indexes
deviate from full calendar year-end synchronization, which means that the frequencyof the releases does not necessarily nest neatly into the standard
annual/quarterly/monthly framework. Examples include a biannual index that isbased on data to March and September year-ends, and annual indexes based on data
to a March year-end.
Some indexes are refreshed and released quarterly but do not fulfill all therequirements of a full quarterly index in that not all assets are re-valued each quarter.
These indexes reflect a rolling valuation frequency which may vary from quarterly toannual. In these cases, the index is considered to be a rolling 12-month index that is
updated each quarter.
MSCI Private Real Estate Indexes may be either frozen (fixed history) or unfrozen(history updated at each release date to reflect current composition and available© 2023 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

MSCI.COM | PAGE 7 OF 13

MSCI Global Methodology Standards for Real Estate Investment | November 2023

data). This distinction is also made clear in the naming of each Standard Index. All
unfrozen are labeled “unfrozen,” while all frozen indexes receive no such label.

Examples of MSCI Private Real Estate Standard Index Names:
MSCI U.S. Annual Property Index (Unfrozen)
MSCI/AREF UK Quarterly Property Fund Index{Brand/co-brand} {country/region} {minimum frequency} {Property/Property Fund} Index{History}

4.2

MSCI PRIVATE REAL ESTATE INDEX SUBSET
Any index subsets can in principle become a “named” sub-index of any Standard
Index through the application of attribute filters (also known as a screen) to theStandard Index. Three broad types of filter attributes are most commonly used,which can be applied to both Property and Property Fund Indexes. These are:-Peer Group filters
Peer group filters are based on characteristics of the fund or portfolio rather
than the underlying assets and may be linked to the type of investor, thestructure of the fund, its investment strategy or mandate, or its overall size(i.e. MSCI/AREF UK All Balanced Quarterly Property Fund Index).
Indexes defined by clients that exclude specific portfolios or funds fall into
this category. Such screening is commonly used when clients wish to
exclude their own (fund, portfolio or house) contribution to an index for the
purposes of relative measurement. (i.e. MSCI U.S. (excluding Fund X)
Quarterly Property Index (unfrozen)).

-

Geographic filters
Geographic filters include or exclude certain regions from the overallgeographic scope of a particular Standard Index, usually for the purpose ofmatching a geographical defined investment mandate (i.e. MSCI UK Central
London Quarterly Property Index). One or more countries may be ruled out ofa multinational index or a subset of regions from a country index. In certain
cases, a mandate will focus on a very specific target area for investment andthis will require an equally specific index.

-

Property attribute filters
Property attribute filters encompass a wide variety of asset characteristics
that can be used to define index subsets. These attributes are most

© 2023 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

MSCI.COM | PAGE 8 OF 13

MSCI Global Methodology Standards for Real Estate Investment | November 2023

obviously applicable to Property Indexes, but in certain cases can also be
used to create sub-indexes from Property Fund Indexes. The most frequently
referenced attributes are property sectors and more detailed property types,
as defined in the MSCI Property Indexes Methodology (i.e. MSCI Germany
Shopping Centers Annual Property Index (unfrozen)). Other commonly
required property attribute filters include the size of a property (either basedon capital value or floor space), its construction date and its green building
certification (if available).
For filters based on asset value bands, MSCI offers both recalibrated and nonrecalibrated (fixed) indexes. For recalibrated indexes, property value is one of theindex criteria (e.g., Shopping Centers >£20m at each period end). Because property
values change over time, such indexes may require recalibration. The recalibration
procedure is defined in the MSCI Property Indexes Methodology.
MSCI’s multinational Property Indexes can be market-size weighted (using MSCI’s
Market Size estimates) or sample weighted (based solely on the data provided to
MSCI without reweighting). Therefore, for all multinational Property Indexes theweighting method is always referenced in the index name. However, all MSCI’s
multinational Property Fund Indexes are sample weighted and therefore this attributeis not included in the naming of those indexes.
In addition to the standard weighting options, clients may provide MSCI with target
weights, drawn from investment strategies or mandates, to be used for reweighting
in custom indexes.
Examples of MSCI Private Real Estate Index Subset names:
MSCI U.S. (excl. Fund xxx) New York Office Annual Property Index (Unfrozen)
MSCI/AREF UK All Balanced Quarterly Property Fund Index{Peer Group Filters} {Geographic Filters} {Property Attribute Filters}

4.3

MSCI PRIVATE REAL ESTATE INDEX SERIESThe index series names for each Standard Index are designed to indicate the index
calculation methodology and specifically reference a pre-defined performancemeasure.
The performance measure reference will often include additional elements so thatthe full designation of the measure is clear. The most commonly used and reported
performance measure is total return, but any other performance measure may bereported and thus referenced in the series name. For property fund indexes more

© 2023 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

MSCI.COM | PAGE 9 OF 13

MSCI Global Methodology Standards for Real Estate Investment | November 2023

details are required for measures, because they are using different methodologies
and could be either net or gross of fees, like:- Gross Total Return - Modified Dietz- Net Total Return - Modified Dietz- Net Total Return - Unitized Adjusted for Crossholdings
Additional information on the reported measure (e.g., unweighted average orpercentile ranking), its currency and currency conversion method (e.g., fixed,variable) may be included in the index name to help fully define the index series. If,
however, the measure is based on the value-weighted average, that feature will not
be included in the name since this is the standard default basis for MSCI real estate
performance measures. In addition, the currency conversion method is not includedin the index series name for a single national market that is reported in its local
currency.
For Property Indexes, the index series name may include additional information on
the inclusion/exclusion of property assets that reflect the nature of the investment
interest (e.g., directly held property only or including indirect interests). The default
analysis inclusion filter is All Assets. In other cases (Standing Investments, NonOperating assets and Same Store) this filter label will be included in the index name.
However, the investment type “directly held domestic property” is considered to be adefault position, and so is not included in any Property Index series name.
Examples of MSCI Private Real Estate Index Subset names:
MSCI U.S. (excl. Fund xxx) New York Office Annual Property Index (Unfrozen) (Total
Return; USD)MSCI/AREF UK All Balanced Quarterly Property Fund Index (50th Vehicle-level Percentile
Net Total Return - Unitized Adjusted for Crossholdings; GBP)
{Measure Function} {Measure} {Currency}© 2023 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

MSCI.COM | PAGE 10 OF 13

MSCI Global Methodology Standards for Real Estate Investment | November 2023

5

APPENDIX: Versioning Table
VersionPublication
Date

V1.0

June 2019

Review
Date

Key Changes
First release of separate document,
which outlines the methodology
documentation for the MSCI Private
Real Estate Indexes.
The content of the previously MSCI
Global Methodology Standards forReal Estate Investments is included in
the MSCI Property Indexes
Methodology document as well as theindex naming conventions.

V2.0

Jun 2021

Updated section 3.6 on Market
specific PFI documents to remove
specificity around MSCI/AREF UK
Property Fund Index document withintroduction of other PFI methodology
documents.

© 2023 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

MSCI.COM | PAGE 11 OF 13

Contact us
realestate@msci.com+ 44 20 7336 4783

AMERICAS
CanadaABOUT MSCI
+ 1 416 687 6284

US+ 1 212 804 3900

EUROPE, MIDDLE EAST & AFRICA
UK+ 44 20 7336 9200
France+ 44 20 7336 4783

Germany+ 49 691 3385 900

Italy+ 44 20 7336 9684

Spain

+ 34 93 467 7403

South Africa+ 27 11 656 2115

Sweden+ 46 8 400 252 30

ASIA PACIFIC
Australia+ 61 2 9033 9300
Hong Kong+ 852 2844 9333

Singapore+ 65 6826 9339

Japan

+ 81 3 5211 1455

MSCI is a leading provider of criticaldecision support tools and services forthe global investment community. With
over 45 years of expertise in research,data and technology, we power better
investment decisions by enabling clientsto understand and analyze key drivers ofrisk and return and confidently build
more effective portfolios. We create
industry-leading research-enhanced
solutions that clients use to gain insight
into and improve transparency acrossthe investment process.
To learn more, please visit
www.msci.com.

NOVEMBER 2023

MSCI Global Methodology Standards for Real Estate Investment | November 2023

Notice and disclaimer©MSCI. All rights reserved. ©MSCI. All rights reserved. This document and all of the information contained in it, including without limitation all text, data, graphs, charts (collectively, the“Information”) is the property of MSCI Inc. or its subsidiaries (collectively, “MSCI”), or MSCI’s licensors, direct or indirect suppliers or any third party involved in making or compiling any
Information (collectively, with MSCI, the “Information Providers”) and is provided for informational purposes only. The Information may not be modified, reverse-engineered, reproduced or
redisseminated in whole or in part without prior written permission from MSCI.
The Information may not be used to create derivative works or to verify or correct other data or information. For example (but without limitation), the Information may not be used to create
indexes, databases, risk models, analytics, software, or in connection with the issuing, offering, sponsoring, managing or marketing of any securities, portfolios, financial products or otherinvestment vehicles utilizing or based on, linked to, tracking or otherwise derived from the Information or any other MSCI data, information, products or services.
The user of the Information assumes the entire risk of any use it may make or permit to be made of the Information. NONE OF THE INFORMATION PROVIDERS MAKES ANY EXPRESS OR
IMPLIED WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE INFORMATION (OR THE RESULTS TO BE OBTAINED BY THE USE THEREOF), AND TO THE MAXIMUM EXTENTPERMITTED BY APPLICABLE LAW, EACH INFORMATION PROVIDER EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIESOF ORIGINALITY, ACCURACY, TIMELINESS, NON-INFRINGEMENT, COMPLETENESS, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE) WITH RESPECT TO ANY OF THE
INFORMATION.
Without limiting any of the foregoing and to the maximum extent permitted by applicable law, in no event shall any Information Provider have any liability regarding any of the Information
for any direct, indirect, special, punitive, consequential (including lost profits) or any other damages even if notified of the possibility of such damages. The foregoing shall not exclude or
limit any liability that may not by applicable law be excluded or limited, including without limitation (as applicable), any liability for death or personal injury to the extent that such injury resultsfrom the negligence or willful default of itself, its servants, agents or sub-contractors.
Information containing any historical information, data or analysis should not be taken as an indication or guarantee of any future performance, analysis, forecast or prediction. Past
performance does not guarantee future results.
The Information should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment
and other business decisions. All Information is impersonal and not tailored to the needs of any person, entity or group of persons.
None of the Information constitutes an offer to sell (or a solicitation of an offer to buy), any security, financial product or other investment vehicle or any trading strategy.
It is not possible to invest directly in an index. Exposure to an asset class or trading strategy or other category represen ted by an index is only available through third party investable
instruments (if any) based on that index. MSCI does not issue, sponsor, endorse, market, offer, review or otherwise express any opinion regarding any fund, ETF, derivative or other security,
investment, financial product or trading strategy that is based on, linked to or seeks to provide an investment return related to the performance of any MSCI index (collectively, “Index Linked
Investments”). MSCI makes no assurance that any Index Linked Investments will accurately track index performance or provide positive investment returns. MSCI Inc. is not an investment
adviser or fiduciary and MSCI makes no representation regarding the advisability of investing in any Index Linked Investments.
Index returns do not represent the results of actual trading of investible assets/securities. MSCI maintains and calculates indexes, but does not manage actual assets. Index returns do notreflect payment of any sales charges or fees an investor may pay to purchase the securities underlying the index or Index Linked Investments. The imposition of these fees and charges
would cause the performance of an Index Linked Investment to be different than the MSCI index performance.
The Information may contain back tested data. Back-tested performance is not actual performance, but is hypothetical. There are frequently material differences between back tested
performance results and actual results subsequently achieved by any investment strategy.
Constituents of MSCI equity indexes are listed companies, which are included in or excluded from the indexes according to the application of the relevant index methodologies. Accordingly,
constituents in MSCI equity indexes may include MSCI Inc., clients of MSCI or suppliers to MSCI. Inclusion of a security within an MSCI index is not a recommendation by MSCI to buy, sell,or hold such security, nor is it considered to be investment advice.
Data and information produced by various affiliates of MSCI Inc., including MSCI ESG Research LLC and Barra LLC, may be used in calculating certain MSCI indexes. More information canbe found in the relevant index methodologies on www.msci.com.
MSCI receives compensation in connection with licensing its indexes to third parties. MSCI Inc.’s revenue includes fees based on assets in Index Linked Investments. Information can befound in MSCI Inc.’s company filings on the Investor Relations section of www.msci.com.
MSCI ESG Research LLC is a Registered Investment Adviser under the Investment Advisers Act of 1940 and a subsidiary of MSCI Inc. Except with respect to any applicable products orservices from MSCI ESG Research, neither MSCI nor any of its products or services recommends, endorses, approves or otherwise expresses any opinion regarding any issuer, securities,
financial products or instruments or trading strategies and MSCI’s products or services are not intended to constitute investment advice or a recommendation to make (or refrain frommaking) any kind of investment decision and may not be relied on as such. Issuers mentioned or included in any MSCI ESG Research materials may include MSCI Inc., clients of MSCI or
suppliers to MSCI, and may also purchase research or other products or services from MSCI ESG Research. MSCI ESG Research materials, including materials utilized in any MSCI ESG
Indexes or other products, have not been submitted to, nor received approval from, the United States Securities and Exchange Commission or any other regulatory body.
Any use of or access to products, services or information of MSCI requires a license from MSCI. MSCI, Barra, RiskMetrics, IPD and other MSCI brands and product names are the trademarks,
service marks, or registered trademarks of MSCI or its subsidiaries in the United States and other jurisdictions. The Global Industry Classification Standard (GICS) was developed by and is
the exclusive property of MSCI and Standard & Poor’s. “Global Industry Classification Standard (GICS)” is a service mark of MSCI and Standard & Poor’s.
MIFID2/MIFIR notice: MSCI ESG Research LLC does not distribute or act as an intermediary for financial instruments or structured deposits, nor does it deal on its own account, provide
execution services for others or manage client accounts. No MSCI ESG Research product or service supports, promotes or is intended to support or promote any such activity. MSCI ESG
Research is an independent provider of ESG data, reports and ratings based on published methodologies and available to clients on a subscription basis. We do not provide custom or oneoff ratings or recommendations of securities or other financial instruments upon request.
NO REGULATED USE OF ANY MSCI PRIVATE REAL ASSETS ESTATE INDEX IN ANY JURISDICTION IS PERMITTED WITHOUT MSCI’S EXPRESS WRITTEN AUTHORIZATION. THE PROCESSFOR APPLYING FOR MSCI’S EXPRESS WRITTEN AUTHORIZATION CAN BE FOUND ON THE INDEX REGULATION PAGE OF MSCI’S WEBSITE AT: https://www.msci.com/index-regulation.
Privacy notice: For information about how MSCI ESG Research LLC collects and uses personal data concerning officers and directors, please refer to our Privacy Notice at
https://www.msci.com/privacy-pledge.

© 2023 MSCI Inc. All rights reserved.

MSCI.COM | PAGE 13 OF 13