Real estate transparency improves
Better data availability and governance making Asian real estate more attractive to investors, says JLL
published : 7 Jul 2022 at 04:00
newspaper section: Business
Thailand held its ranking as the 10th most transparent real estate market in Asia-Pacific and third in Southeast Asia, according to the Global Real Estate Transparency Index from JLL and LaSalle Investment Management.
The country's transparency score improved slightly from 2.64 in 2020 to 2.63 in 2022. Scores range from 1 for high transparency to 5 for opaque. The scores for the top five markets -- the UK, US, Australia, France and Canada -- ranged from 1.25 to 1.44.
Thailand's global ranking dropped one position to 34th place from the previous biennial index as Romania's ranking jumped from 35th in 2020 to 32nd in 2022.
"Thailand has held firm on its status as a transparent real estate market since it moved up from the semi-transparent tier in the 2020 index," said Michael Glancy, country head of JLL in Thailand. "Continued improvement in market transparency will boost Thailand's competitiveness and help it attract more capital as the country has now been fully reopened."
The biennial index provides a unique benchmark of market transparency for property investors, developers and corporate occupiers. This year's 12th edition includes 254 individual indicators to assess market transparency across 94 countries and territories and 156 cities. Rankings are based on the availability and quality of performance benchmarks and market data, governance structures, regulatory and legal environments, transaction processes and sustainability indicators to help investors and occupiers make informed, risk-based decisions.
MORE ACCESS TO DATA
According to the index, across Asia-Pacific real estate markets continue to mature and become more accommodating for investors and occupiers, driven by gains in regulation, sustainability and access to enhanced data. Due to measurable improvements in transparency, the region's commercial real estate sector is better positioned to attract increased capital in the coming years.
While markets are changing at different rates, the data reveal an overall uplift in real estate transparency regionally. In 2022, Japan joins the "highly transparent" category for the first time on the back of advances in net-zero commitments, the introduction of more sustainability-focused building standards, and enhanced transparency around climate risk reporting. Singapore moved closer to the "highly transparent" category with deeper data coverage and clear sustainability commitments.
Elsewhere, India registers among the top global improvers, with increased institutional investment and the maturing real estate investment trust (REIT) segment helping to increase the quality and availability of market data.
In China, new building efficiency, heightened emissions standards, and better processes and data for sales transactions in Shanghai and Beijing have helped the country cement its position in the "transparent" tier.
"The strides toward greater transparency in Asia-Pacific will intensify investor interest and bolster occupier confidence in this region," said Anthony Couse, chief executive for Asia-Pacific at JLL.
"As a result, we expect to see more capital deployed into those markets that can demonstrate consistent efforts to make accurate data available, enforce legal protections for property ownership, and enhance the regulatory environment to facilitate the transactions."
JLL has also observed a shift in terms of the role sustainability plays in the decision-making process, Mr Couse said.
"The encouraging progress and implementation of broad net-zero carbon plans and strategies will place resilient and sustainable real estate at the core of the longer-term attractiveness of this region for investors and occupiers," he said.
According to the survey findings, an increasing number of Asia-Pacific countries and cities have followed up on previously announced climate commitments by establishing mandatory energy efficiency and emissions standards for buildings, aligning with broader net zero carbon goals.
The report also found more widespread adoption of green and healthy building certifications, with leading markets beginning to mandate sustainability reporting from companies and collecting public building-level information on energy efficiency and emissions.
Diversification remains a core theme for many investors in Asia-Pacific. Institutional capital, such as that controlled by asset managers, pension funds and sovereign wealth funds, is active in alternative real estate sectors in nearly two-thirds of the markets tracked. That means expectations for transparency across niche property types like lab space, data centres or student housing have grown.
"As data availability rises to meet demand, we expect over $200 billion in direct investment into Asia-Pacific in 2022," said Roddy Allan, chief research officer for JLL in Asia-Pacific. "Investors continue to diversify their capital across traditional and alternative property sectors, albeit investors are showing a little more caution given current global challenges.
"They will continue to choose core assets such as offices and shopping centres, but will also incorporate more healthcare, data centres and logistics assets, aided by detailed market information and analysis."
To download the full Global Real Estate Transparency Index 2022 report, go to https://www.jll.co.th/en/trends-and-insights/research/global-real-estate-transparency-index/transparency-survey-highlights-2022