Transaction Linked Indicators

categories: EMEA, Pan-Europe, Denmark, France, Germany, Ireland, Netherlands, Norway, Sweden, Switzerland, UK, Transaction Linked

Over the last few years MSCI has been developing a hybrid index methodology which couples transaction information with MSCI’s standard valuation data to give a more complete measure of the volatility of, and thus risk inherent in, property investment markets.

It is important to understand that these transaction linked indicators are not proposed as alternatives to MSCI’s conventional valuation based indexes (VBIs). The low liquidity of commercial real estate investment markets will always mean that for most market tracking and performance assessment purposes, valuation based measures will remain essential. VBIs do a good job of tracking performance and cyclical patterns in the mature investment markets worldwide.

The low liquidity of these markets, however, means that the added risk of trading heterogeneous and generally large assets can be understated without factoring valuation to sale price movements into the analysis. This is the primary and crucial supporting role that the transaction linked indicators are designed to fulfill.

To date this work extends across the following European markets and regions:

  • Denmark
  • France
  • Germany
  • Ireland
  • Netherlands
  • Norway
  • Sweden
  • Switzerland
  • UK
  • Eurozone
  • Pan Europe

A report of the methodology and indicators is now available.