Published July 1, 2008

Singapore's real estate transparency ranking dips

JLL cites enhanced survey questions for slide from 9th to 11th position


SINGAPORE and Hong Kong now rank side by side in 11th position on Jones Lang LaSalle's (JLL) Global Real Estate Transparency Index 2008, down from joint ninth position when the index was last revealed in 2006.

However, JLL said the reason is not a change in market practices but enhancement of the survey questions.

The company's head of research (South East Asia) Chua Yang Liang said: 'Singapore remains one of the most transparent markets in Asia alongside Hong Kong. Among the five key attributes assessed in the survey - performance measurement, market fundamentals, listed vehicles, legal and regulatory environment, transaction process - both countries scored very well for their legal and regulatory environment. Together with Finland, they topped the global ranking for this sub-index.'

JLL said that in keeping with historical results, the Australian and US real estate markets remain among the most transparent in the world and now are joint-ranked second. But with the addition of new variables relating to the quality and frequency of valuations, service charge transparency and financing transparency, Canada now ranks as the world's most transparent commercial real estate market.

The index, which provides a framework for comparing the level of real estate transparency in 82 markets around the world, revealed that eight countries moved up a full transparency tier since the last index in 2006.

Dubai, Romania, Ukraine and Russia showed the biggest improvements in transparency over the past two years.

A number of countries in the frontier markets are included in the index for the first time, with Belarus, Sudan, Algeria, Cambodia and Syria all scored as 'opaque'.

Other new entrants to the index, Bahrain, Bulgaria, Estonia, Latvia, Croatia, Abu Dhabi and Lithuania, scored in the 'semi-transparent' range, while Oman, Qatar, Morocco, Kuwait, Pakistan and Kazakhstan all scored in the 'low transparency' range.

The biggest improvers in Asia-Pacific were India, China and Vietnam. China (Tier-1 cities) showed the greatest improvement, moving up to the 'semi-transparent' tier to rank in 49th position.

Not all investors, however, target markets that are highly transparent.

LaSalle Investment Management global strategist Jacques Gordon said: 'Many cross-border investors focus on more mature, open and transparent real estate markets such as the UK, Canada, Netherlands and Hong Kong. However, opportunistic investors will consider the emerging, less mature, less open and semi-transparent markets, but will require higher returns to compensate for the higher risks associated with lower transparency.'