India, China and Vietnam, which have received greater attention from investors and corporations in recent years, have improved the most in Asia Pacific in terms of real estate transparency, the latest Global Real Estate Transparency Index compiled by Jones Lang LaSalle and LaSalle Investment Management has found.
China exhibited the greatest improvement, moving up to the semi-transparent tier (Tier 3) and is now considered more transparent than India. However, the two emerging giants of the region remain very close in terms of overall real estate transparency, according to the biannual index released yesterday.
Around the globe, the survey reveals that in 2008, eight countries have 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 last two years.
The index, which provides a rigorous framework for comparing the level of real estate transparency in 82 markets around the world, shows that nearly half of the countries surveyed in 2006 demonstrated a significant improvement in their transparency score two years later.
The steady improvement in transparency, particularly over the last four years, is closely linked to globalization that drives investors to move across borders in search of higher risk-adjusted returns. This movement of capital and corporations around the world has created an even greater need for information about markets, said Jacques Gordon, global strategist at LaSalle Investment Management.
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.
Only the most opportunistic investors will consider semi-transparent markets found in Eastern Europe, Latin America and Southeast Asia. Opaque markets are still the most problematic, the index compiler concluded.
(Shanghai Daily July 1, 2008)
