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Thailand ranked 34th in Global Real Estate Transparency Index

Availability of market data and greater regulatory enforcement are among key contributors to Thailand’s improvement ranking from 38th to 34th place in Global Real Estate Transparency Index

Daniel Lorenzzo

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In the newly released biannual Global Real Estate Transparency Index (GRETI) 2018 by property consultancy firm JLL, Thailand is ranked 34th, an improvement from the 2016 edition of the Index where the country was ranked 38th.

Compared to the other six countries from Southeast Asia covered by the Index, Thailand is ranked the 3rd most transparent real estate market in the sub region followed by Indonesia, Philippines, Vietnam and Myanmar that were ranked globally 42nd, 48th, 61st and 73rd respectively.

This 10th edition of the Global Real Estate Transparency Index (GRETI) contains the most comprehensive country comparisons of data availability, governance, transaction processes, property rights and the regulatory/legal environment around the world.

The 2018 Index covers 100 countries and 158 city markets, and the number of individual factors covered has increased by 36% to 186 factors.

“Transparency across Thailand’s real estate markets has continuously improved over the last decade thanks largely to increased availability of and access to market data. While the growth of listed companies and real estate investment vehicles has contributed a lot to improving financial disclosures, greater regulatory enforcement, the planned introduction of a new property tax system and steps to digitise its land registry will underpin the country’s improvement in real estate transparency further.”

Mrs. Suphin Mechuchep, Managing Director of JLL, says

“The improved level of transparency represents a sign of growing maturity of Thailand’s real estate market. It helps owners, investors and occupiers identify opportunities and anticipate challenges more accurately, and consequently make better real estate decisions,” Mrs. Suphin adds.

Biggest improvements in Asia Pacific

“Asia Pacific as a whole has made the strongest transparency improvements since 2016 compared to the other four regions covered by the study,” says Dr Megan Walters, Head of Research, Asia Pacific at JLL.

“This is supported by developments in Myanmar, Macau, Thailand, India and South Korea.”
Myanmar has registered the most significant improvement globally, moving up 15 places to join the ‘Low Transparency’ group.

According to the report, the country continues to open up its economy as increasing investor demand translates into greater market intelligence.

For the first time, South Korea has nudged into the ‘Transparent’ tier, with heightened investor activity pushing improvements in data coverage and a new carbon emissions trading scheme.

Macau has also advanced with a focus on anti-money laundering, resulting in increased monitoring by financial regulators

Dr Walters adds: “It’s also worth noting that India’s reform-driven government has made significant progress in its agenda to improve transparency and reduce corruption. The Real Estate Regulatory Act, which was passed in 2016 and implemented in 2017, is a regional highlight. The country joins China, Indonesia and Thailand at the top end of the ‘Semi-Transparent’ tier.”

Asia Pacific shows fastest progress in real estate transparency

Asia Pacific’s mature economies such as Singapore, Hong Kong and Japan, have a significant opportunity to advance real estate transparency through proptech adoption. These leading investment destinations are on the cusp of the ‘Highly Transparent’ tier, and are poised to join the top group, which includes countries such as Australia, New Zealand, the U.S. and the UK.

“The proptech sector is growing fast, especially in Asia, though adoption is still relatively low compared to North America and Europe,” says Jeremy Kelly, Director, Global Research, JLL.

“We believe the Singapore government could play a key role in promoting proptech adoption through open-data initiatives and the pioneering of blockchain technology.”

“The potential benefits of proptech are certainly not limited to transparent markets,” he adds. “It could also help improve transparency in semi-transparent markets like China, which has a vibrant proptech sector, and where traditional data sources are lacking.”

Another key area of potential improvement for both Singapore and Hong Kong is in sustainability transparency. Strengthening energy efficiency requirements, carbon reporting and stricter energy consumption disclosure will help them make the step up; and in this regard, they could emulate Japan, which has become a global leader in sustainability transparency.

Advancing sustainability

 Progress has been made on sustainability transparency across the region. South Korea introduced a carbon emissions trading scheme; meanwhile Vietnam established its own market-specific Green Building Certification System several years ago and is implementing mandatory minimum energy efficiency standards for all new buildings and major retrofits.
Improvements in transparency in some Asian countries have been accompanied by record-breaking commercial real estate investment volumes.

In 2017, real estate transactions in the Asia Pacific region reached a record US$149 billion.

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