Europe dominates a ranking of the world’s most transparent real estate markets with six of the top 10 found in the region, according to JLL and LaSalle Investment management’s 2016 Global Real Estate Transparency Index (GRETI).
Of the 109 global real estate markets analysed, two-thirds have shown progress in levels of transparency over the past two years.
The United Kingdom is the most transparent market in the world, and is joined by France (5th), The Netherlands (7th), Ireland (8th), Germany (9th) and Finland (10th) in the Highly Transparent category.
France consolidates its position among the top group with advances in its regulatory and legal environment, whilst Germany joins the ‘Highly Transparent’ group for the first time, moving up three places from 2014, owing to improvements in the listed sector.
Just outside the top 10, Poland (13th) is one of Europe’s standout markets, jumping four places from 2014 and moving in step with core western countries.
Jeremy Kelly, director of global research programmes at JLL, said: “The world is more transparent than it has ever been, and standards continue to improve, but at the same time, the gap between the most and the least transparent markets is widening.
“Within the next decade, in excess of US$1trillion will be targeting real estate compared to US$700bn now, challenging the definition of what it means to be transparent. We expect to see the rise of a new ‘Hyper-Transparent’ category in future years, where real-time data feeds from sensors help inform owners and tenants about the performance of their buildings,” he added.
‘Highly Transparent’ markets account for 75% of investment into commercial real estate globally, highlighting the extent to which transparency drives real estate decisions. As capital allocations to the asset class grow and transparency moves to the forefront of the international political agenda, investors are demanding further improvements in transparency on a par with other asset classes.
Amongst Middle Eastern and African markets, Botswana (41) – which is the top improver in Sub-Saharan Africa – Saudi Arabia (63) and Egypt (65) have moved into the semi-transparent category. This is the most improved group, characterised by strengthening corporate governance, increasing availability of market data and a growing middle class that is mobilising against corrupt practices.
Turkey (44), Dubai (48), Abu Dhabi (59) and Bahrain (67) also rank in the semi-transparent category. Furthermore, Iran (77) – which enters GRETI for the first time – joins Nigeria (83) and Ghana (85), which have both moved up the rankings, in the low transparency category. This group, while still challenged by weak corporate governance, is benefiting from technology and the introduction of some regulations and market tracking.
“The overall steady progress in real estate transparency globally is down to a number of factors, such as initiatives to deepen the availability and quality of market data and performance benchmarking, the enactment of new legislation, the introduction of higher ethical standards and the wider adoption of ‘green building’ regulations and tools,” said Kelly.
"JLL constantly refines its assessment criteria to keep pace with global changes to the regulatory and legal environment. This year’s Index is our most comprehensive to date, covering 109 markets assessed for 139 discreet factors."
Global Real Estate Transparency Index 2016 – Top 10
- United Kingdom
- United States
- New Zealand