African Real Estate Markets Push Through Transparency Reforms

African Real Estate Markets Push Through Transparency Reforms 
Sub-Saharan Africa Tops Global Index in CRE Transparency Improvement 
-- 06/19/14 --  Where transparency broadens, real estate capital
flows and market change follows. This trend has finally made its way
to one of the "final frontiers" of commercial real estate:
Sub-Saharan Africa (SSA), which has claimed five of the global top 10
spots for greatest improvements in real estate market transparency:
Kenya, Ghana, Nigeria, Zambia and Mauritius. With an influx of
corporate occupiers, the region's top-rising economies are moving to
encourage more global real estate interest.  
Across the globe, key drivers of transparency improvement include: 

--  Governments' recognition that poor transparency affects investment and
    quality of life
--  Media spotlight on corruption, scandals and building accidents
--  A rise in cross-border investments fuelled by more robust real estate
--  Millennials' expectations, pushing "Open Data" and sustainability
    practices up the agenda

According to the 2014 release of JLL and LaSalle Investment
Management's bi-annual Global Real Estate Transparency report, SSA
countries are in the very early stages of building and reforming
their commercial real estate industry infrastructure; their responses
to outside interest, however, mirrors top improvers from previous
surveys, such as the MIST (Mexico, Indonesia, South Korea and Turkey)
countries, which dominated the 2012 Global Top 10, and BRICs (Brazil,
Russia, India and China) in 2010.  
"The top improvers in each cycle generally correlate with a surge in
foreign direct investment, as investors push through transparency
reforms and because governments quickly realize that poor
transparency will deter continued inward investment," said Jeremy
Kelly, Director, JLL Global Research. "Kenya is a great example. It
saw a spike in FDI projects in the last year, and not coincidentally,
it made the greatest leap in real estate industry transparency this
Kenya has initiated a number of real estate industry infrastructure
improvements, including land record digitization, enhanced property
market research and analysis, and the introduction of a REIT
framework for the country. These measures propelled Kenya to 55th
place in the Transparency Index from 67th in 2012. 
The cross-border catalyst 
Whether in Africa or elsewhere, cross-border activity is a key driver
of improvement in market transparency. In Latin America for example,
strongest gains have been achieved in Colombia and Peru, which are
key targets of international real estate capital. Progress is
generally moving at a slow -- though still forward -- pace in other
parts of the world. In Asia Pacific, none of the regional players
made the Top 10 improvers list this year as compared to three in
2012, largely due to limited improvement in market data availability
and slow progress in policy reforms. "The same applies to other top
improvers in previous cycles, like Turkey, South Africa, Dubai and
Poland, though the reasons for this vary considerably," said Craig
Plumb, Head of MENA Research, JLL. "In Poland, the sluggish pace of
transparency change could be attributed to the fact that many
cross-border investors have demonstrated overall satisfaction with
its current level of transparency, whereas in the MENA region,
promising signs of reform leading up to the global financial crisis
have not been maintained at the same pace, with the notable exception
of Qatar."  
Only in a handful of markets has transparency actually worsened.
These include Ukraine, highlighting how political uncertainty can
quickly undermine transparency levels.  
Pushing innovation 
Nowhere is the relationship between market sophistication and
incremental change more apparent, however, than the top tier of the
Transparency Index. Highly Transparent markets have had the types of
reforms that may propel other countries from the Low to
Semi-Transparent rung for many years. As a result, progress at the
highly transparent end of the scale, which remains dominated by
Anglophone markets, largely comes down to innovation and
technological developments such as open-data initiatives.  
"These kinds of innovations will be critical catalysts of change in
real estate transparency moving forward. We can count on that, since
the digital information revolution is being fuelled by a young,
hyper-connected, information hungry, highly transient workforce
generation," Jacques Gordon, Global Strategist, LaSalle Investment
Management, concluded.  
About JLL's Global Real Estate Transparency Index 
The Global Real Estate Transparency Index, first published in 1999,
is based on a combination of quantitative market data and information
gathered through a survey of the global business network of JLL and
LaSalle Investment Management. For each market a total of 115
separate factors have been assessed, through data collection and
survey questions, answered by local research teams in collaboration
with business leaders. These 115 factors are grouped into 13 topic
areas and further grouped into five sub-index categories -- a)
performance measurement, b) market fundamentals, c) governance and
financial disclosure of listed and unlisted vehicles, d) regulatory
and legal and e) transaction process. A Composite Index for each
market is created from the weighted scores of the 115 factors. The
scores range on a scale from 1.0 to 5.0. A country or market with a
perfect 1.0 score has total real estate transparency; a country with
a 5.0 score has total real estate opacity. Countries/markets are
assigned to a one of five transparency levels ranging from Highly
Transparent, Transparent and Semi-Transparent to Low Transparency and
For investors, the Index provides a risk management tool by offering
comparative information across multiple geographies, facilitating
informed global/regional investment strategies and country target
allocations. The Index enables corporate occupiers to more
efficiently assess different real estate operating environments
across the globe. Transparent markets allow for easier comparison of
occupancy costs; provide more options for strategic action (e.g. the
execution of sale and leasebacks); and raise the efficiency of
transactions and facilities management. 
About JLL  
JLL (NYSE: JLL) is a professional services and investment management
firm offering specialized real estate services to clients seeking
increased value by owning, occupying and investing in real estate.
With annual fee revenue of $4 billion, JLL has more than 200
corporate offices and operates in 75 countries worldwide. On behalf
of its clients, the firm provides management and real estate
outsourcing services for a property portfolio of 3 billion square
feet and completed $99 billion in sales, acquisitions and finance
transactions in 2013. Its investment management business, LaSalle
Investment Management, has $48.0 billion of real estate assets under
management. JLL is the brand name of Jones Lang LaSalle Incorporated.
For further information, visit 
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Megan Dolan
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