The number of small non-listed funds adopting the INREV Guidelines rose from 54% in 2009 to 71% in 2010, the association for non-listed European investment vehicles announced on Thursday. INREV defines small funds as those with assets under management of less than EUR 100 mln. Overall, 97% of non-listed real estate funds use more than 50% of the guidelines, a decrease of one percentage point on the previous year.

In a press statement, INREV said the slight overall decline last year was probably due to sampling and indicated a stabilisation in adoption levels. 'This levelling off reflects the fact that the industry has reached a certain level of maturity in its reporting practices, with the INREV Guidelines being used as the de-facto industry standard.'

The area that continues to pose the biggest challenge is fee metrics where there has been no improvement in adoption levels since 2009. The INREV Fees Committee will be leading initiatives to improve both the metrics and adoption levels of this element of the Guidelines, said Jeff Rupp, Director of Public Affairs and Professional Standards.

The survey found that 46% of the reports reviewed disclosed an adjusted NAV compared to 42% in 2009. Of the 46% with an adjusted NAV, 80% either fully complied with the INREV NAV calculation or referenced the INREV measure as the basis for their calculations.

However, there is still further work to be done on increasing the number of funds using adjusted NAVs in their reports, Rupp said. 'Next year we’re planning to look at how fund managers address NAV adjustments as part of an overall review of the INREV Guidelines. Our aim is to offer additional guidance on best practice.'

Other significant gains were made in specific areas such as property reporting where the INREV Guidelines are now being adopted by 90% of funds, up from 79% in 2009. Likewise, in the area of financial reporting there was an increase to 75% of all funds complying with most of the INREV Guidelines.