Index firm FTSE Russell will create a new industry group for the real estate sector by separating listed real estate firms from the financials sector within its industry classification system.
The London-based firm says that it plans to adopt the new structure at the end of 2018. The new real estate grouping will have a market cap of approximately US$2 trillion, representing 4% of the FTSE Global All Cap Index. The revised financials sector will make up about 20% of the global market capitalization.
FTSE says that the move to establish a distinct real estate industry group follows the creation of a new real estate group in the industry classification system that is jointly managed by S&P Dow Jones Indices and MSCI, known as the Global Industry Classification Standard (GICS).
“FTSE Russell’s elevation of real estate as its 11th industry is timely, as the listed real estate industry is growing strongly and is increasingly viewed as an investment asset class in its own right,” said Dominique Moerenhout, CEO of the European Real Estate Association (EPRA).