Global Annual Property Index

Currency movements can have a big impact on performance as this chart demonstrates.

2001-2017

Source: MSCI IPD

As real estate becomes an increasingly global asset class, currency risk is becoming an increasingly important consideration for investors. Currency movements can have a big impact on performance as this chart demonstrates. Over the full history of the MSCI Global Annual Property Index, the annualized total return has been 7.4 percent measured in local currency terms, but that performance can look very different when measured in other currencies. For example, measured in South African rand, the index’s annualized total return would have been 11.2 percent, while if it was measured in Swiss francs, the total return would have been 4.9 percent. The stability of returns can also be strongly impacted by currency movements so investors with foreign currency exposures need to think carefully about how they manage them.