In times of uncertainty, real estate transparency* is more critical than ever
Markets that lead in transparency are the ones pulling further ahead through investments in AI and technology integration, data availability, and sustainability.
That’s according to JLL and LaSalle’s (NYSE: JLL) biennial, proprietary Global Real Estate Transparency Index (GRETI), which measures market transparency to guide decisions on real estate investment, development, and occupancy across 89 countries and territories worldwide.
*Note: The term “real estate transparency” refers to the availability and reliability of information about real estate markets, including data on—
- Property prices
- Transaction processes
- Legal frameworks
- Environmental impacts
- Market fundamentals
Transparency Improvements and Regional Highlights
While real estate transparency has improved, for the most part, since JLL’s 2022 report, Europe remains the most transparent. Top improvers in 2024 include India, the U.S., France, Australia, and Canada, while Singapore made the “Highly Transparent” list for the first time.
Singapore’s focus on sustainability and digital services boosted its transparency profile, while other Asian countries followed suit, recording the strongest average transparency improvements since 2022. India led the way as the top transparency improver globally.
According to the index, highly transparent commercial real estate markets have shown the strongest progress.
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. Diversification will be critical as the investable universe continues to expand in terms of breadth and complexity. Brian Klinksiek - Global Head of Research and Strategy for LaSalle Investment Management
At the other end of the spectrum, Sub-Saharan Africa reported the least progress in transparency, though Kenya, Nigeria, and Ghana showed signs of improvement.
AI and Technology Integration
According to estimates, over 500 companies worldwide are providing real estate-specific AI services, contributing to transparency by automating data analysis (and summarization), building management, and design processes.
For example, JLL’s own AI platform, JLL GPT, is one of a growing number of tools that enhance data review and summarization to improve transparency across the real estate industry.
To ensure responsible AI deployment, new policies, such as the U.S. Executive Order on AI and the EU AI Act, are being introduced to manage the risks involved with AI and to maintain and enhance transparency in real estate markets.
Sustainability and Regulatory Changes
Sustainability showed the most significant improvement in the 2024 index, with France, Japan, and the U.S. leading in the implementation of energy performance standards, sustainability reporting, and commitments to biodiversity.
Despite this progress, though, transparency in sustainability metrics remains limited across the globe. Markets not among the most transparent show a continuing lack of—
- Mandatory building performance standards
- Public disclosure of energy use
- Climate risk reporting, and
- Resilience planning
Just 30% of the demand for low-carbon office space in major global markets is expected to be met by 2030, highlighting the need for increased transparency and a more aggressive pace for building decarbonization efforts.
Investment Trends and Financial Transparency
The most transparent countries of 2024 attracted over $1.2 trillion in direct commercial real estate investment dollars over the past two years—accounting for more than 80% of the global total—allowing them to lead in liquidity recovery as market activity increases.
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. 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. Richard Bloxam - CEO, Capital Markets, JLL
Roughly $3.1 trillion of global real estate assets have maturing debt between 2024 and 2024, with $2.1 trillion requiring refinancing. The proliferation of non-bank lenders has given rise to concerns about transparency as new credit sources challenge the traditional dominance of regulated banks.
Key Details:
- JLL and LaSalle’s Global Real Estate Transparency Index 2024 report shows the rising importance of transparency in real estate, driven by AI and sustainability efforts in markets across the globe.
- The report highlights key improvements, leadership, and challenges in global real estate transparency as well as progress in both AI and sustainability.
- The U.S., Canada, France, and Australia are the global top improvers in transparency, while Singapore joined the “Highly Transparent” group for the first time, boosted by its focus on sustainability and digital services.
Posted by Sarah Lentz | Aug 29, 2024 | Housing Market
https://nowbam.com/how-transparent-markets-are-leading-the-way-in-real-estate-recovery/
@ChuckBarberini - #ChuckBarberiniRealEstate - @ChuckBarberiniRealEstate
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