JLL & LaSalle Global Transparency Index 2022: With its ranking at the 25th position, Luxembourg qualifies as a transparent market
Vincent Van Brée
Valina Sempot - vsmc bv/srl
Bertrange, 5 July 2022 – In its JLL & LaSalle Transparency Index 2022, JLL highlights that Europe is leading the way on real estate transparency as a raft of new sustainability legislation raises industry standards.
The 12th Global Real Estate Transparency Index is released today by JLL, in partnership with LaSalle, and has become the industry benchmark and an essential guide for cross-border investors and corporate occupiers.
Globally, the World Economic Forum has acknowledged the real estate sector as responsible for more than 20% of the world’s carbon emissions and other environmental impacts. However, Europe is leading the world in driving improvements and greater transparency, through a combination of enhanced regulation, tracking of sustainability metrics and integration of technology.
The index shows six of the 12 countries classed as ‘Highly Transparent’ are in Europe with France, the Netherlands, Germany and Belgium among the most improved, joining Ireland and Sweden.
The UK once again tops the index with the conflict in Ukraine reviving stalled legislation which will require overseas owners of real estate to disclose their beneficial owners in a public accessible register. Glasgow, Edinburgh, Manchester and Birmingham are all among the top 20 most transparent cities, while London is top ahead of New York and Paris.
Globally, the US is rated number two in the index while Japan joins the ‘Highly Transparent’ list for the first time. Australia, Canada and New Zealand round out the top 12. With its ranking at the 25th position, Luxembourg qualifies as a Transparent market mainly thanks to its fair transaction process, adequate Regulatory & Legal framework and good market fundamentals. In Mainland China, Shanghai and Beijing have solidified their positions in the ‘Transparent’ tier with enhancements in data availability, technology, consistency of regulations, and property management. India is among the top global improvers with greater professionalisation of the sector, new regulations and increased market data.
“The influence of external events including geopolitical conflict, economic volatility and lingering effects of COVID-19 that has permeated the last two years has had widespread effects on the global real estate market,” said Richard Bloxam, CEO, Capital Markets, JLL.
“Transparency is the foundation which allows corporate occupiers, as well as investors and lenders to the world’s largest asset class, to operate and make decisions with confidence. While we are encouraged to see increased transparency in many of the world’s leading markets, limited improvements in many other global markets have resulted in one of the slowest rates of progress in the index’s history and highlights growing disparity in transparency around the world.”
Dubai and Abu Dhabi are the top two improvers overall, with Dubai entering the ‘Transparent’ tier for the first time as it benefits from a government focus on improving market transparency, leading to better data coverage, enhanced digital services, new regulations around market lending practices and sustainability reporting.
The most significant advances since 2020 have been made in sustainability, as countries and cities follow up on their climate commitments with increasing building energy performance standards and reporting requirements while green and healthy building certifications become more widespread. France heads the sustainability rankings with new regulations establishing limits on embodied carbon in buildings and minimum requirements for existing buildings, and the creation of databases to track building-level energy consumption.
The implementation of the EU’s updated Energy Performance of Buildings Directive (EPBD) and a range of other regulations impacting the built environment, such as the Green New Deal and Fit for 55 package will bring further clarity and alignment in Europe.
“Belgium entered the “Highly Transparent” tier for the first time partly thanks to new sustainability standards like more stringent energy reporting”, said Pierre-Paul Verelst, Head of BeLux Research, JLL.
The index shows a widening gap between the leading countries in Europe and the US and other countries lower down the global rankings where progress has been slow.
DATA & TECHNOLOGY
Cybersecurity and data protection and demand for better health and social outcomes are also likely to be future transparency considerations. Advances in technology are generating huge volumes of new data, particularly for niche property types as the push for diversification intensifies – but the landscape remains complex and highly fragmented, and the need to ensure privacy and security are protected is also rising.
“Historically, reliable market data on alternative properties was often scarce, or non-existent, even in otherwise highly transparent real estate markets,” said Jacques Gordon, Head of Global Strategy and Research for LaSalle Investment Management. “The tremendous global growth that we have seen in alternative property investment indicates that this will be a critical space to watch in coming years as advanced data technologies create an ideal environment for greater transparency in this space.”
Going forward, JLL predicts a greater harmonisation and alignment in sustainability initiatives, regulatory environments, technologies and data frameworks across real estate markets. It also expects enhanced climate resilience to be a growing factor as standards adapt to deal with future risks.
Global Real Estate Transparency Index (GRETI)
JLL and LaSalle's Global Real Estate Transparency Index (GRETI), which is published every two years, is a unique benchmark of market transparency for property investors, developers and corporate occupiers. The index evaluates the legal and regulatory environment, enforcement mechanisms and data availability and provides a global comparison of operating conditions across a wide range of geographies. This year’s 12th edition includes 254 individual indicators to assess market transparency across 94 countries and territories and 156 cities globally.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $19.4 billion, operations in over 80 countries and a global workforce of more than 100,000 as of March 31, 2022. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.