S&P: Real Estate to Become its Own Sector
As further evidence that real estate is fast becoming the fourth major institutional asset class, S&P has announced that it will create a new sector for the industry.
“S&P Dow Jones Indices, a leading provider of financial market indices, and MSCI Inc., a leading provider of investment decision support tools worldwide, announced today that as a result of their annual review of the Global Industry Classification Standard (GICS®) structure, a new Real Estate Sector is being created, elevating its position from under the Financials Sector and bringing the number of GICS Sectors to 11. Additionally, a new Sub-Industry for Copper is being created. The changes are being considered for implementation after the market close (ET) on August 31, 2016.”
The decision comes as institutional investors are increasingly reallocating capital away from other asset classes and to commercial real estate. To learn more, visit:
https://www.bloomberg.com/article/2014-11-10/aGu.vRSIL7eU.html
http://www.forbes.com/sites/maggiemcgrath/2014/11/11/sp-to-make-real-estate-its-11th-sector/
Frequently Asked Questions about S&P’s Classification of Real Estate as a Distinct Sector
What major change did S&P and MSCI announce regarding real estate?
S&P Dow Jones Indices and MSCI announced that they would create a new Real Estate Sector in the Global Industry Classification Standard (GICS), elevating it from being a subset under the Financials Sector.
When was the new Real Estate Sector scheduled to take effect?
The changes were scheduled to be implemented after the market close on August 31, 2016.
Why did S&P decide to create a distinct Real Estate Sector?
The decision reflects the growing importance of real estate as an institutional asset class, as more capital is being reallocated from other sectors to commercial real estate.
What does this change signal about real estate’s status as an asset class?
It further supports the notion that real estate is becoming the “fourth major institutional asset class,” alongside cash, equities, and bonds.
How many sectors are now recognized in the GICS structure after this change?
With the addition of the Real Estate Sector, the GICS structure now includes 11 sectors.
