South Africa ranks 25th in Global Real Estate transparency

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South Africa’s property market has once again been ranked as the most transparent in the world, according to JLL’s latest global real estate transparency index. South Africa’s property market has once again been ranked as the most transparent in the world, according to JLL’s latest global real estate transparency index.

New research shows 75% of global real estate investment takes place in highly transparent markets, with South Africa ranking 25th out of 109 markets covered — supported by its listed property sector.

SA Commercial Prop News has learned some news that South Africa’s property market has once again been ranked as one of the most transparent in the world, according to JLL’s latest global real estate transparency index.

The index reveals which countries provide the most favourable operating environments for investors, developers and corporate occupiers.

Although SA has registered a noteworthy decline in overall score, the country remains Sub-Saharan Africa’s most transparent market, supported by its active listed property sector.

Also read: SA Property Market volumes to a staggering R5.8-trillion

SA’s real estate transparency score was 2.2 in 2016, a marked improvement in transparency. The scores in the Index range between one and five, with one representing the highest level of transparency and five being the least transparent.

The United Kingdom, Australia, Canada and the United States hold the top positions and are taking real estate transparency to a new level; making improvements that go beyond other transparent markets, particularly in the granularity, quality, frequency and geographical spread of performance measurement, valuations and market fundamentals data, which now also extend to niche property sectors.

Sub-Saharan Africa makes progress in real estate transparency

While tangible improvements in transparency are being made, Sub-Saharan Africa is still some distance from competing equally with its counterparts in the EMEA region and sizeable efforts are required to close the gap with other global regions.

Craig Hean, Managing Director: Sub-Saharan Africa at JLL South Africa, comments, “Sub-Saharan Africa continues to make advances in real estate transparency, but progress has been patchy with limited development in regulatory and legal reforms and enforcement.”

Key Sub-Saharan Africa highlights:

  • Sub-Saharan Africa has continued to make advances in real estate transparency over the last two years, although progress has been more mixed than in 2014.
  • Six markets (Botswana, Zambia, Ethiopia, Nigeria, Angola and Ghana) have recorded reasonable progress in transparency since the 2014 Index.
  • The improvement from Botswana, Zambia and Ethiopia has secured these countries a position on the ‘global top 10 improvers’ list.
  • Despite these advances, the region has seen a slight deterioration in the legislative and operating environment which appears to have stalled in several markets, with two countries – South Africa and Mozambique – registering a noteworthy decline in overall score.
  • South Africa, however, remains Sub-Saharan Africa’s most transparent market, supported by an active listed sector. It is the only country from the continent to feature in the ‘Transparent’ category.
  • Technology is allowing some countries (Rwanda, Ghana, Kenya) to leapfrog the normal transparency evolution process by introducing innovative new ways of improving access to data or to faster, more reliable services.
  • Complexities of implementing new regulatory structures and the impact of slowing commodity markets have stalled progress in certain areas.

Anthony Lewis, Head of Capital Markets, Sub-Saharan Africa comments, “One of the issues currently clouding the Sub-Saharan Africa market sentiment is currency and liquidity risk. There is significant uncertainty, especially in Nigeria, Angola and Mozambique and to a lesser extent Zambia, owing to acute U.S. dollar illiquidity and lack of direction on monetary and central bank policies to alleviate this. This compounds transparency risks.”

Covering 109 markets worldwide, the index quantifies transparency based on 139 variables relating to transaction processes, regulatory & legal frameworks, and corporate governance. Higher real estate transparency is associated with stronger investor and corporate real estate activity.

READ MORE ON:

SA Property Market  |  Listed Property / REITs  |  Craig Hean  |  Anthony Lewis

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