JLL Global Real Estate Transparency Index reveals improved performance of Sub-Saharan countries.
The JLL Global Real Estate Transparency Index covers 109 markets across the world, and studies 139 different variables in order to be able to detail which countries have the best operating environments, for those wanting to invest in the real estate market. Each country is then placed into one of five categories; Highly Transparent, Transparent, Semi-Transparent, Low Transparency and Opaque.
The United Kingdom currently holds the title of the world’s most transparent market and with the expected continued increase in levels of transparency a new category titled Hyper-Transparent is expected to be created in the next few years.
High levels of transparency within the real estate market help to drive stronger levels of investment, it is therefore essential for a country to increase its transparency if it wants to see significant growth in its real estate sector.
Africa continues to improve its transparency
Whilst European countries continue to top the list of the most transparent real estate markets, African nations are improving their rankings by continuing to make progress in regards to their transparency. The consequences of a country failing to comply with comprehensive building regulations, has recently been emphasized due to some high profile issues including building collapses. These devastating events have helped to escalate the importance of both having and enforcing comprehensive building standards and controls.
The greatest improvements within the continent are currently being seen in Sub-Saharan Africa countries, although they are still some way behind their counterparts in the EMEA (Europe, Middle East and Africa) region.
Craig Hean from JLL South Africa recently said, “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.”, “a growing recognition by governments across the region of the critical role transparent real estate markets can play in a dynamic economy.”, “the greater penetration by international real estate consultancies that are promoting professional standards and availability of market data has already begun to improve transparency in some areas.”.
Ethiopia, Zambia, Botswana, Ghana, Angola and Nigeria have successfully improved their transparency over the last 2 years, in fact Ethiopia, Zambia and Botswana have been included on the recently published “global top 10 improvers” list. Botswana has actually even managed to move up into the semi-transparent category, whilst Ghana and Nigeria have moved up into the low transparency category. The director of global research programs at JLL Jeremy Kelly said, “The world is more transparent than it has ever been, and standards continue to improve, but at the same time, the gap between the most and the least transparent markets is widening.”.
Other African countries are however not fairing as well, in fact both Mozambique and South Africa have seen notable deteriorations with their overall transparency scores, although even with this decline South Africa still tops the list of the most transparent real estate market in Sub-Saharan Africa.
Technology is also playing a part in some countries improved performance, by ensuring that data is accurate and can also be easily accessed, this is particularly evident in Kenya, Ghana and Rwanda. The Head of Capital Markets Anthony Lewis, said about Sub-Saharan Africa, “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.”