Category Archives: General

Increasing transparency across global real estate markets

Posted on 27 Jun 2012 | Comments Off on Increasing transparency across global real estate markets

The Jones Lang LaSalle 2012 Global Real Estate Transparency Index found that 90 per cent of markets have advanced in real estate transparency.
Increased transparency in global real estates markets aids investors and occupiers, according to a report by Jones Lang LaSalle.

According to the 2012 Global Real Estate Transparency Index report, a staggering 90 per cent of markets have registered advances in real estate transparency, over the last two years.

Improved market data and performance measurement, as well as better governance of listed vehicles have driven advancements within the market.

Singapore and Hong Kong topped the global transparency tables.

The 2012 Global Real Estate Transparency Index calculated transparency in 97 real estate markets by analysing a total of 83 differing factors.

The report found that the US ranks as the world’s most transparent real estate market in 2012, followed closely by the UK and Australia.

Existing countries considered ‘Highly Transparent’ are the Netherlands, New Zealand, Canada, France, Finland, Sweden, and Switzerland.

Ranking under the ‘Transparent’ bracket were Hong Kong, Germany, Singapore, Denmark, and Ireland.

The ‘Semi-Transparent’ band consisted of the Philippines, Thailand, and Indonesia.

The Jones Lang LaSalle survey provides investors and corporate occupiers with data and analysis fundamental to transacting, owning, and operating in global markets.

The Index reiterated the ascent of the MIST (Mexico, Indonesia, South Korea, and Turkey) growth markets; all are amongst the leading improvers. Turkey consistently leads with the most improved transparency rate.

“While the world economy is still in recovery, the 2012 Index reveals that real estate investors and corporate occupiers are widening their activity across a broader range of markets. This cross-border activity encourages faster rates of transparency improvement in growth and emerging economies as the market opens up further to international competition and their real estate sectors embrace global best practices,” said Jacques Gordon, global head of strategy for LaSalle Investment Management.

Managing director of Singapore and Southeast Asia, Jones Lang LaSalle Chris Fossick, said: “The real estate markets in Southeast Asia have made significant inroads in improving their transparency over the past two years. Three out of the top ten improvers globally are from the region – The Philippines, Indonesia, and Vietnam.

“All three countries have improved on the back of greater availability of market data and changes in the regulatory and transaction processes. With the exception of Vietnam, most Southeast Asia markets are either in the transparent (Singapore and Malaysia) or semi-transparent band.

“This finding is echoed by the recent rise in direct foreign investments (FDI) into the ASEAN especially into Indonesia and the Philippines. The rise of FDI into ASEAN is testament of global investors’ confidence of the long-term growth potential in this region.”

He confirmed that whilst there are no Asian cities in the top ten highly transparent global markets, Hong Kong ranks the highest in Asia at 11. Singapore is closely behind, ranking at number 13.

“Both Singapore and Hong Kong have shown improvements in their overall global ranking with Hong Kong marginally ahead of Singapore as a result of more detailed market fundamental data,” said Mr Fossick.

The 2012 Index showed continued transparency deficiencies in many African, Middle Eastern and Latin American markets.

Ranking lowest, under the ‘opaque’ market were: Venezuela, Mongolia, Tunisia, Ghana, Iraq, Pakistan, Algeria, Belarus, Angola, Nigeria, and Sudan.

National director of Global Research at Jones Lang LaSalle, Jeremy Kelly said: “While steady progress in real estate transparency has been made during the past two years, much still needs to be done. The pace of regulatory and legal reform has been slow, and we have seen limited improvement on the transparency of transition processes, despite recognition by government and industry bodies that transparent real estate markets are necessary.”

Looking ahead, Kelly speculated on the presiding issues likely to lead to further transparency results in the next update of 2014. He cited that a growing recognition in many emerging economies that the current lack of performance indicators and accurate market information is hindering inward investment and crippling the development of competitive domestic real estate sectors.

Property sustainability characteristics will affect lease and investment decisions; growing from a marginal criterion to a critical decision-making input. This will result in greater transparency of energy efficiency and Green Building benchmarking.

The ongoing financial crisis, particularly in Europe, will motivate regulators, central banks, foreign investors, and other real estate professionals towards better transparency, in the process offering more public data on real estate debt and monitoring lenders more closely.

Source: PropertyReport – 2012 Jun 27

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Why encourage rent-seeking?

Posted on 27 Jun 2012 | Comments Off on Why encourage rent-seeking?

Mr Conrad Raj suggests, in his commentary “One size does not fit all” (June 18), that “(property cooling) measures should be targeted to impact those (foreigners) we desire less, not all and sundry”.

Who are the undesirable foreigners he thinks should be the target of exorbitant stamp duty?

Mr Raj believes that we should welcome “ultra-rich” foreigners who invest in extremely expensive property. He suggests that modestly priced private property should be the subject of additional stamp duty on foreigners.

This targets middle-class, professional foreigners and their families; foreigners who contribute productively to the economy, foreigners who buy property here because they need a place to live here, not because they need a place to park their money.

It targets foreigners who pay income tax, Goods and Services Tax, Certificates of Entitlement, maid levies and other fees and taxes, which subsidise the “goodies” doled out to citizens in the Budget each year.

If differentiation is to be made in the private property market and among different sorts of foreigners, then Mr Raj’s suggestion is exactly the opposite of what the Government should consider doing.

Money streaming here from the world’s ultra-rich skews the property market, driving up prices across the board. In a market with limited supply, it signals to developers to build housing geared towards investment, such as shoebox units, rather than family home ownership. It also encourages rent-seeking rather than productive investment capitalism.

We should encourage the ultra-rich to invest productively in Singapore, such as in start-up companies, not encourage unproductive rent-seeking.

Recently, I lunched with an intelligent woman in her 20s from China who received a master’s degree from the National University of Singapore. She is keen on pursuing a career in journalism.

She sought a job here over the past year but was consistently turned away because she is neither a citizen nor permanent resident, a status she has little chance of achieving nowadays. After four years here, she left for Guangzhou to build her career there.

Singapore’s housing, transportation, education and other infrastructure have been put under strain by the rapid population expansion through immigration. This is something the Government is properly addressing.

But targeting middle-class professional foreigners as undesirable and driving away talent while encouraging rent-seeking, rather than productive investment capitalism, is not the way to do it.

From Eric Thompson

Source : Today – 2012 Jun 25

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