Transparency in global real estate markets has shown marked improvement in 2024, according to the Global Real Estate Transparency Index (GRETI) released today by JLL and LaSalle.
The report underscores the importance of transparency, particularly in uncertain times, with the most transparent markets outpacing their peers by leveraging technology integration, artificial intelligence (AI), and sustainability measures.
While transparency has risen globally, Europe continues to lead as the most transparent region. Notably, highly transparent commercial real estate markets have seen the most significant progress. The United States, Canada, France, and Australia are among the top improvers, with Singapore joining the 'Highly Transparent' category for the first time, driven by a focus on sustainability and digital services.
Artificial intelligence and sustainability initiatives are pivotal in shaping the future of real estate transparency. AI's rapid proliferation is expected to significantly boost transparency by analyzing large volumes of data, automating building management, and influencing urban design. Regulatory measures, such as the U.S. Executive Order on AI and the EU AI Act are essential to ensure responsible AI deployment.
Sustainability emerged as the most improved area in the 2024 Index. Countries like France, Japan, and the United States have implemented rigorous energy performance standards and sustainability reporting requirements, setting new benchmarks in the industry. In the U.S., over 40 cities have committed to implementing Building Performance Standards by 2026. Despite these advances, global sustainability metrics remain less transparent, with a notable gap in mandatory building performance standards and climate risk reporting.
The transparency of debt markets and financial regulations is also under scrutiny. With an estimated US$3.1 trillion in global real estate debt maturing between 2024 and 2025, the relative lack of transparency in non-bank lending is a growing concern. The shift towards diversified lending sources, including debt funds and insurance companies, has introduced complexities, making it more challenging to monitor financing conditions.
Transparency in anti-money laundering (AML) and beneficial ownership (BO) regulations remains a key focus area, with new global guidelines aiming to track true ownership and enhance regulatory frameworks. Inconsistencies in implementation and the potential for circumvention continue to challenge the effectiveness of these regulations, however. Countries like India, Indonesia, and the United Arab Emirates have introduced regulatory changes, with further developments expected in regions including the U.S., Singapore, and the European Union.
