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News Release


Asia Pacific Shows the Best Improvement in the World’s Global Transparency Ratings

Jones Lang LaSalle’s Global Transparency Index shows China and India recorded the greatest advances in the Asia Pacific region

The 2010 Global Real Estate Transparency Index released today by Jones Lang LaSalle and LaSalle Investment Management revealed a worldwide slowdown in the progress of real estate transparency over the past two years. The survey suggests that the recent turmoil in global financial, economic and real estate markets has impacted on market behaviour, with real estate players focusing on survival rather than market advancement. The average improvement in real estate transparency across the 81 markets covered by the survey has halved in 2008-2010, when compared to the 2006-2008 and 2004-2006 periods, with Australia leading the global stage, along with China and India which have seen the largest jumps up the transparency ladder. 

According to the transparency index, Australia now ranks as the world’s most transparency market, pushing Canada into second place and the UK into third.  The traditional leading pack - Australia, New Zealand, the UK, the United States and Canada, have now been caught up by a number of European markets, namely  Sweden, Ireland and France who now sit amongst the world’s most transparent markets. Turkey registered the world’s strongest improvement due to the alignment of its legal and regulatory systems with the EU. 
Of the key components of real estate transparency, the transparency of the transaction process appears to have been compromised most by the more challenging real estate market conditions of the past two years.  More surprising is the evidence of a slowdown of progress in the transparency of real estate regulatory and legal environments.  The quality and depth of information on market fundamentals continues to improve nonetheless, helping to boost this dimension of transparency in most markets across the globe.

Nonetheless, there are a number of bright spots, and transparency continues to improve, albeit modestly, in the majority of markets. Of the top 15 improvers, nine are in Europe and six are in Asia Pacific. Turkey tops the league table of transparency improvers, and progress has been made in China, India, Poland, Portugal, Romania, Greece and Hungary.  A number of more advanced markets, such as Germany, Ireland and Denmark, have also moved up the transparency league.

Asia Pacific

The Asia Pacific region has shown the most broadly based improvements in transparency over the past two years.  Australia and New Zealand are the region’s most transparent markets, closely followed by Singapore and Hong Kong. Rising levels of transparency are associated with rising levels of foreign direct investment, a powerful incentive for encouraging the free flow of information and the fair and consistent application of local property laws. It is in India and China where the region’s greatest improvements in transparency has been recorded, a trend that has now filtered across India and China’s secondary and tertiary cities which have shifted from the Low-Transparency to a Semi-Transparent level. 

Alastair Hughes, Chief Executive Officer for Jones Lang LaSalle in Asia Pacific comments, “I am pleased to see the most transparent real estate market is in the Asia Pacific region and that transparency of the transaction process is improving generally in our market. One of the chief concerns for the international real estate investor is where to safely place capital, and at the same time corporate occupiers need a clear understanding of global operating conditions. The Transparency Index will help both investors and occupiers operating in foreign markets to anticipate these challenges. For governments and industry organizations, the index provides a gauge to help improve the transparency in their home markets.”

“The steady improvement in market fundamentals, including stabilizing/increasing rentals is likely to underpin strengthening investment activity in the region. Asia Pacific is expected to grow faster than the overall global economy in 2010 on the back of broad-based growth in both the domestic and external sectors, however further interest rate hikes that are expected across the region may impact on buying sentiment,” said Mr. Hughes.

Michael Klibaner, head of Research for Jones Lang LaSalle China comments, “The big improvement for China and India has been mainly due to increased data availability and ongoing regulatory changes.”  In both markets, the recent boom in real estate markets has greatly contributed to the improvements, as both public and private sector players have taken important steps forward to promote greater levels of transparency.  International corporate occupiers and investors are increasingly demanding better information on market fundamentals, while government agencies and market regulators have made slow but steady progress on the regulatory and legal front.  Indian cities in each city-tier are now considered slightly more transparent than the Chinese city-tier. However, the two emerging economic giants of the region remain very close in terms of overall real estate transparency.

The transparency improvements in China and India are a reflection of the greater focus given by corporations who view these two countries as the twin engines of growth. Compared with the Europe and the US, where consumers are still paring spending after the global financial crisis, China and India provide better opportunities for growth and have the critical mass to support the operations of both multinational corporations as well as locally established Asian companies.

“In China, The deal-making environment for investors has improved with better access to title records and land registry information, as well as more predictability in the enforcement of contracts,” noted David Hand, head of China Investment for Jones Lang LaSalle, “Investment transactions from one foreign investor to another can occur quickly and smoothly. The turnaround time to line up financing and complete due diligence is shorter as all relevant information can be obtained with relative ease.”

“Investors have shown more confidence in the protection available to them in second tier cities. However, professional standards are not consistent across the different tiers. In the future, new laws and better regulatory enforcement will further improve transparency in China. The most important change will be how consistently new rules are applied in lower tier cities.” Mr Hand added.


Europe shows a mixed picture of transparency. Turkey and some CEE markets have shown good progress, as their markets become more internationally traded and their regulatory and legal environments become aligned with core EU economies.  In fact, the more advanced CEE countries like Poland, Czech Rep and Hungary have now caught up with the least transparent markets in Western Europe, such as Italy and Austria, which have struggled to improve real estate transparency. Further east in Russia and the Ukraine, transparency improvements have stalled in 2010, a reflection of the severity of the real estate downturn in both markets, and in sharp contrast to the strong improvements registered in 2008.

The Americas

The Americas markets have shown more modest changes in transparency.  Transparency improvements have stalled in the region’s two most transparent markets, the United States and Canada, as well as in most Latin American markets. Canada and the United States have however remained the region’s only two Highly-Transparent (Tier 1) countries, and rank among the world’s most transparent markets. Only Brazil registered a notable improvement, while Venezuela which showed a sharp deterioration between 2006 and 2008 has seen a further weakening in 2010.


Markets in the MENA region, which were highlighted in our 2008 Index for their strong progress in transparency, have had a set back in 2010.  A number of Gulf markets have registered deterioration in transparency, including Kuwait, Dubai and Bahrain.  Pakistan has also struggled to maintain even poor transparency levels.  Dubai, which was rocked particularly hard by the real estate crisis, epitomises the region’s struggle to improve transparency levels. 

Real Estate Debt Transparency

In light of the financial crisis, the transparency Index has specifically assessed the transparency of the real estate debt markets in terms of the breadth and depth of data available on commercial real estate debt -originations, outstanding balances, maturities, and defaults as well as how thoroughly real estate debt on banks’ balance sheets is monitored.  Debt transparency varies vastly across the world.  In aggregate, countries tended to score lower on data availability than on the banking regulations, with even many developed countries lacking data availability on commercial real estate debt. The countries that scored highest on debt transparency were Ireland, Canada and Australia.

In the future, regulators will rightfully emphasize the importance of more disclosure in order to gauge the credit-worthiness of commercial real estate and to evaluate the sector’s ability to carry debt.  As these steps are put in place, it is expected the transparency of real estate debt, and hence all real estate capital markets, will rise.  But it is not likely that the inherent cyclicality of real estate will ever be eliminated.

The major debt related news story in MENA was the Nakheel group failing to make its debt service payments on Dubai World in 2009. Since this happened, the region is rethinking how real estate properties should be financed. A debt restructuring proposal for Dubai World has been released which addresses how the government will deal with excessive debt and the oversupply of property from large overbuilding over the past 8 years. Although this proposal represents progress, most real estate debt in the region has been downgraded, especially in Dubai.

Across much of Asia Pacific, there is still a lack of clarity on the size of total outstanding commercial real estate debt, and more detailed information is generally not easily available. Even in Australia, information on real estate debt markets is not easily available from a central source as it comes from various sources such as REITs, commercial banks, the central bank and credit rating agencies. However, the poor availability of information on commercial real estate debt is less of an issue in the region than for Europe or the Americas, as real estate players in the Asia Pacific region generally rely on banks and not the debt market for real estate financing. Similarly, less stringent oversight of commercial real estate lending by bank regulators has not led to severe problems as the region has emerged relatively unscathed from the global financial crisis.

The last two years demonstrate how high levels of transparency certainly do not eliminate risks for investors or occupiers. However the real value of transparency should become evident when comparing how quickly markets are able to open up again after a financial crisis.