Transparency improved globally in 2024 and highly transparent real estate markets make strong progress, outpacing peers, amid investments in technology integration and AI, data availability and sustainability, according to the latest survey by JLL.
The proprietary Global Real Estate Transparency Index (GRETI) which is published every two years by the leading global commercial real estate and investment management company, benchmarks market transparency to help inform how real estate is invested in, developed, and occupied in different regions around the globe. This year’s 13th edition includes 256 individual indicators to assess market transparency across 89 countries and territories and 151 cities globally.
While transparency has increased across most nations and territories since JLL’s 2022 report, the index finds that Europe remains the most transparent region, and highly transparent commercial real estate markets have seen the strongest progress. Among the global top improvers are the U.S., Canada, France, and Australia, while Singapore has entered the ‘Highly Transparent’ group for the first time, boosted by a focus on sustainability and digital services. The top set of countries has attracted over $1.2 trillion in direct commercial real estate investment over the last two years, representing over 80% of the global total, positioning them to lead the cyclical recovery in liquidity as capital market activity increases.
In step with Singapore, countries in the Asia region have recorded the strongest average transparency improvements since 2022. Globally, India is the top improver in transparency, with greater data coverage and quality across property sectors ranging from industrial to data centers. Japan, Australia, cities in Mainland China, South Korea, the United Arab Emirates, and Saudi Arabia also saw progress in 2024. By contrast, the Sub-Saharan Africa region saw the least progress in transparency, though some signs of improvement emerged in Kenya, Nigeria, and Ghana.
“The focus on transparency for investors has never been greater in global real estate markets as external challenges such as geopolitical tensions and election cycles draw increased attention in the near term,” said Richard Bloxam, CEO, Capital Markets, JLL. “On the horizon, additional drivers like artificial intelligence and higher standards of sustainability obligations and reporting will continue to push investors to seek greater transparency.”
“Highly transparent markets in this year’s Index represent over half of income-producing real estate worldwide. Countries with transparent pricing and fundamentals, especially across the diverse range of specialty sectors and sub-sectors, will likely lead the real estate liquidity recovery,” said Brian Klinksiek, Global Head of Research and Strategy for LaSalle Investment Management. “Diversification will be critical as the investible universe continues to expand in terms of breadth and complexity.”
Debt markets, money laundering, and beneficial ownership are among key transparency themes to watch, according to the report. Approximately US$3.1 trillion of global real estate assets have maturing debt between 2024 and 2025, and US$2.1 trillion of debt will need refinancing. Roughly 30% has been completed over the first half of 2024; however, monetary authorities have raised concerns about the potential risks from the relative lack of transparency as non-bank lenders expand and complement traditional sources of credit. While commercial real estate lending was historically dominated by regulated banks, the lender landscape has broadened with new credit sources such as debt funds, pensions and insurance companies emerging. This diversification has created a more balanced market, but also one with less visibility into financing conditions in many countries, raising new transparency concerns.
Alongside debt markets, money laundering and beneficial ownership regulations have surfaced as transparency areas to watch. New guidance from the Financial Action Task Force (FATF), requiring countries to ensure they can track the true ownership of companies, paired with widening financial sanctions regimes, have maintained momentum for improving anti-money laundering (AML) and beneficial ownership (BO) regulations.
Despite global action, the effectiveness of these regulations remains under scrutiny as implementation and definitions are often inconsistent and easy to circumvent, JLL said. Countries such as India, Indonesia, the United Arab Emirates and the U.S have introduced changes to AML and BO regulations to help drive transparency, and additional regulations are underway in the U.S., Singapore, Switzerland, Canada, Australia, and the EU.
