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Real estate transparency inches up
Vietnam has made some improvement in its level of real estate transparency, according to a biennial report by a global property services firm.
The Global Real Estate Transparency Index from Jones Lang LaSalle, which provides a rigorous framework for comparing the level of real estate transparency in 82 countries, assesses five key attributes.
These are performance measurement, market fundamentals, listed vehicles, legal and regulatory environment, and the transaction process. On a scale of one to five, one is the highest level of transparency.
Countries were classified into five groups: high tier, transparent tier, semi-transparent tier, low-transparent tier, and opaque transparent tier.
In keeping with historical results, the Australian and US real estate markets remain among the most transparent in the world. With the addition of new variables relating to the quality and frequency of valuations, service charge transparency and financing transparency, Canada ranks as the world’s most transparent commercial real estate market.
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.
The survey also found that transparency levels are improving globally as governments seek to streamline regulatory and legal hurdles to aid cross-border movement of capital and corporate facilities.
In Asia Pacific, transparency has improved across most of the region since 2006. However, the gains are relatively modest for most countries, particularly when compared with the larger improvements between 2004 and 2006.
The biggest improvers in Asia Pacific are India, China and Viet Nam, all of which have received considerably greater attention from investors and corporate occupiers in recent years.
Moderate progress
Andrew Brown, country head, Jones Lang LaSalle Viet Nam, said: "Over the past 2 years Viet Nam has shown some moderate improvement in overall transparency, moving up one tier within our global index from opaque to low transparency.
"Improvement, particularly in the regulatory and legal environment with respect to real estate investment and law, has been primarily responsible for this change."
Dang Van Quang, an official at Jones Lang LaSalle Viet Nam’s Strategic Consulting Services, said thanks to this change Viet Nam is gaining a big advantage.
Many investors are choosing between Viet Nam and India as their new investment destination after China, Quang said.
But Dr. Jane Murray, head of research, Asia Pacific at Jones Lang Lasalle, said, "It is important to note that transparency enhancements should not be viewed as the sole determinant of regional capital flows, instead market fundamentals appear to be the main driving force behind transaction volumes.
"Nevertheless, higher transparency is resulting in a more dispersed flow of capital between countries across the region.
"It is therefore noteworthy that most of the countries surveyed are continuing to improve on the transparency measures, and as a result, enhancing the attractiveness of these markets for real estate investors and occupiers."
VNS
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