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Europe

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Global Real Estate Transparency Index 2016

The world’s most transparent region

Market transparency boosts real estate investment in Europe

Europe continues to maintain its position as the most transparent region for real estate globally. It leads the top end of the global ranking with 20 of the 30 markets classified as ‘Highly Transparent’ or ‘Transparent’ based in the region. Europe remains attractive for investors, particularly foreign capital, with over half of the total European capital flows during 2015 sourced from cross-border investors.

Europe Real Estate Transparency Index, 2016

 

Source: JLL, LaSalle Investment Management​​​​


Wide spectrum of transparency across the region

GRETI 2016 covers 34 European markets, with the introduction of Luxembourg to this year’s survey. The most transparent markets in Europe are once more headed by the UK which again tops the ranking globally. France has maintained a strong 5th position globally with an improvement in ‘Market Fundamentals’ and advances in the ‘Regulatory and Legal’ framework. Germany, for the first time, has moved into the ‘Highly Transparent’ category, securing itself in 9th position globally.

Belarus finds itself, as in GRETI 2014, at the bottom of the European ranking as the only ‘Opaque’ market in Europe. Kazakhstan has achieved a slight improvement in its score and moved up from the ‘Opaque’ to the ‘Low Transparency’ category.

Germany moves to the ‘Highly Transparent’ category

Germany has seen advancements across all sub-indices; in particular the ‘Governance of Listed Vehicles’ has improved due to the country witnessing enormous growth in the listed sector. Added to this is the increasing availability of market fundamentals data, which has been driven by successful entrepreneurs who are offering property listing sites and by several new ‘prop-tech’ companies in the property management, crowdsourcing and data provision sectors.

Further improvement in Central and Eastern Europe

Central and Eastern Europe continues to see large enhancements in transparency with Poland edging towards the ‘Highly Transparent’ category and positioning itself with core Western European countries. In addition, Bulgaria, Slovenia and Serbia are among the top five global improvers in this year’s survey. Progress in the quality and frequency of valuations, as well as more robust levels of market data across the CEE markets, have contributed towards their advancement. Reports such as the KPMG Property Lending Barometer highlight the increasing accessibility of debt data in the region with a particular focus on the CEE markets.

Mediterranean countries struggle to maintain global rankings

The majority of Southern European countries have seen limited progress and hence have been unable to maintain their global rankings, with both Portugal and Spain dropping in the ranking, although Italy has edged up by one position. These countries were hit harder than others during the Eurozone crisis and are still in the recovery phase, which has impacted their scope for advancement.

In South Eastern Europe, Greece has shown an improvement in score but a fall in the overall ranking. A lack of predictability around tax issues coupled with the absence of any tangible performance measurement benchmarks has contributed to a lack of real estate investments in Greece over recent years. Turkey, which led the list of global improvers in 2010 and 2012, has not been able to maintain this momentum and has dropped 10 places in the overall ranking. The continuity of economic and structural reforms needed to encourage investors, especially foreign investors, has been lacking, and this has had a negative effect on investors’ perceptions. ​​

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