Abu Dhabi and Saudi Arabia followed, with a ranking of ‘Semi-Transparent’, while Egypt, Qatar and Kuwait were ranked as having ‘Low Transparency’ and Oman was assessed as ‘Opaque’.
The JLL rankings take into account several factors, scoring the various markets on 254 individual transparency measures which are finally grouped into six broad sub-indices, which then feed into a market’s overall score. The index is a living measure in that criteria evolves with changes in global market trends – this year, there was greater focus on sustainability and the topic area was expanded to include questions such as energy performance standards, building emissions databases and climate risk reporting. The other sub-indices assess legal and regulatory changes, transparency in the real estate transactions process, transparency in disclosure requirements for listed real estate vehicles, investment performance, and market fundamentals such as availability and quality of real estate market data.
DUBAI ENHANCES EFFORTS TO INCREASE REAL ESTATE TRANSPARENCY
Dubai ranked 31 this year, up from 36 in the last round of rankings. The jump is attributable to its efforts in increasing market transparency, with the introduction of new regulations, increased beneficial ownership tracking, sustainability reporting and improved digital services.
Transparency is an increasingly valuable measure, particularly with the global trend towards enhanced financial regulation and disclosure. The countries in the region are taking steps to increase transparency via digitization and innovation, particularly as it applies to automating transaction processes and achieving their sustainability targets.
SAUDI ARABIA IMPROVES REAL ESTATE TRANSPARENCY RANKING
Saudi Arabia ranked 49 on the global list, up from a ranking of 57 in 2020, validating its recent efforts to open up its real estate sector for investment. Egypt has remained relatively steady on the index, ranking 61 in the 2022 rankings, and 60 in 2020, and is also keen on increasing transparency. The country issued a new law earlier this year to ease property registration procedures and encourage creating and maintaining property records.
While transparency in real estate is slightly slower to catch on regionally, experts say that it could be because foreign investment in real estate is a relatively new development and there are multitude of ultra-high-net-worth individuals that tend to hold the lion’s share and value their privacy.
In the meantime, other substantive factors may add nuance to regional real estate investment considerations over transparency issues - for example, there may be foreign ownership limits when investing in listed real estate vehicles, or directly in real estate in some cases, a consideration that may not be immediately obvious to a foreign investor.
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