Asia Pacific ranked most improved for real estate transparency

Coogee, New South Wales, Australia

The Asia Pacific region has been ranked most improved for real estate transparency, with Australia leading the way.

The country ranked second in the world behind the UK in JLL’s Global Real Estate Transparency Index for 2016, behind only the United Kingdom. The “Highly Transparent” group consists of 10 countries, including Canada, the USA and France. Together, they account for 75 per cent of global real estate investment.

Indeed, transparency is important in the performance and accessibility of real estate markets around the globe. International institutions, national governments and businesses are demanding greater integrity and clarity in investments and transactions, as the industry increasingly recognises the crucial role that transparency plays, not only as a facilitator of new investment and business activity but also in community well-being and inclusiveness.

Capital allocations to real estate are also growing, with JLL forecasting that within the next decade in excess of US$1 trillion will be targeting the sector globally, up from US$700 billion now. This growth means investors are demanding further improvements in real estate transparency, expecting standards in real estate to be at least on a par with other asset classes.

In the last two years, Asia Pacific has taken the biggest strides towards greater transparency, says JLL, which monitors factors such as data availability, governance, transaction processes, and the regulatory and legal environment.

Asia Pacific is a diverse region in terms of real estate transparency. Australia continues to hold the top spot as the region’s most transparent real estate market, and together with New Zealand, is classified as “Highly Transparent”.

Overall, though, improvements in most countries across the region have been relatively small. The biggest improver is Taiwan, which has moved into the “Transparent” category for the first time. More moderate improvements were achieved by Japan, South Korea, India and China, with China’s Alpha cities now on the cusp of the “Transparent” category.

At the other end of the spectrum, Myanmar retains the title as the least transparent market in Asia Pacific, although it was among the 10 biggest improvers globally.

The major factor driving improvements in Asia Pacific has been the increased availability and quality of market data. In some countries improvements have also been seen in regard to performance benchmarking, the enactment of new legislation, the introduction of higher ethical standards, and the wider adoption of green building regulations and tools.

“These results are encouraging as they highlight the steady advance of the region’s real estate industry,” says Jeremy Kelly, director, Global Research Programmes at JLL.

“While the region as a whole has shown improvement, most countries in Asia Pacific are still not transparent. There are ongoing examples of poor corporate governance, opaque and corrupt practices and failures in regulatory enforcement that are resulting in serious consequences for society, for business activity and for investment,” adds Dr Jane Murray, Head of Research, Asia Pacific.

“Looking ahead, the continued development of the region’s economies and real estate industry will fuel the need for future enhancements in transparency as investor interest rises and the demand for quality buildings and management grows.”