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United States, United Kingdom, Australia rank as world’s most transparent real estate markets; MIST markets among leading improvers; African, Middle Eastern, Latin American markets lag
Commenting on the findings of the index for the Middle East & North Africa region, Craig Plumb, Head of Research for Jones Lang LaSalle MENA noted that:
“More needs to be done to increase the level of transparency of the market both in Dubai and across the broader region, particularly in respect of investment performance indicators and data on market fundamentals. The lack of progress on these areas in recent years has contributed to the low level of investment activity and the oversupply that is currently being experienced in some sectors of the market.
Middle East and Africa:
While some improvements have been recorded since 2010, the Middle East and Africa remains the least transparent of the 4 global regions covered in the Index. Areas where the MEA region scores particularly poorly include the lack of investment performances indices and the lack of available data on market fundamentals.
Within the MEA region, there is a wide variation in terms of transparency. South Africa is the most transparent market, sharing many of the same characteristics as the Anglophone markets such as the US, the UK and Australia which top the global list of most transparent markets. Dubai is the second most transparent market within MEA and the most transparent within the MENA region. Among the areas that Dubai scores most strongly are its regulatory framework, with RERA (the Real Estate Regulatory Authority) widely acknowledged to be the market leader within the region and the DIFC (Dubai International Financial centre) which is emerging as the vehicle of choice for listed real estate funds.
Lebanon has seen the greatest improvement in transparency within the MENA region over the past 2 years, although this market is currently experiencing some instability due to events in neighbouring Syria. The strong performance of the Beirut market has attracted greater interest from overseas investors and has led to a greater awareness and more market data becoming available. The creation of the Real Estate Association of Lebanon and stricter controls on lending by the Central Bank have also contributed to the improvement in transparency.
At the other extreme, eight of the eleven opaque markets globally are found in the MEA region. While current levels of transparency remains poor in markets such as Sudan, Pakistan, Iraq and Algeria, there is increased interest from international corporate occupiers in these emerging markets and this is likely to result in an improvement in transparency levels over the next few years.
Real Estate Sustainability Transparency Index:In recognition of the increasing relevance of environmental sustainability in real estate decisions, the 2012 Index includes a separate Real Estate Sustainability Transparency Index for a sub-set of 28 countries, covering issues such as energy efficiency benchmarking and green building rating systems. The United Kingdom, Australia and France have emerged as the most transparent markets in terms of real estate sustainability while Dubai is one of the lowest.The 2012 results also reaffirm the relationship between real estate investment volumes and transparency. Rising levels of transparency are associated with higher levels of foreign direct real estate investment, a powerful incentive for encouraging the free flow of information as well as the fair and consistent application of local property laws. The world’s fastest-growing direct commercial real estate investment markets during the past two years – such as Brazil, Turkey, Indonesia and Vietnam – are all among the world’s top 10 transparency improvers.
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Notes to the Editors:
The 2012 Global Real Estate Transparency Index is available to investors and occupiers in multiple platforms, including report, website, PowerPoint and webinar.
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