(4 September 2024, Hong Kong) In times of uncertainty, real estate transparency has become a key factor influencing investment decisions, and markets emerging as the most transparent are pulling ahead, driven by investments in technology integration, AI, data availability, and sustainability. According to JLL and LaSalle’s Global Real Estate Transparency Index (GRETI), these advancements help inform how real estate is invested, developed, and occupied in different regions globally.
The biennial, proprietary GRETI, which benchmarks market transparency, provides investors with an important reference for making informed investment decisions. Since JLL’s 2022 report, transparency has increased across most nations and territories.
Hong Kong remains among Asia’s most transparent markets
The latest 2024 GRETI shows that Hong Kong stands within the ‘Transparent’ category, in 15th place globally. The city remains the third most transparent real estate market in Asia, behind Japan and Singapore, which rank in 11th and 13th place in the world respectively.
Delving into the six sub-index ranks, Hong Kong performs well for “Market Fundamentals” – the availability of information on property market conditions – ranking fifth globally and ahead of Singapore, which ranks 11th place. Hong Kong ranks 12th and 14th globally in the “Performance Measurement” and “Regulatory and Legal” sub-indices respectively, again ahead of Singapore (in 15th and 17th) but behind Japan (in 7th and 12th).
Japan leads the way in “Sustainability”, ranking second globally, while Singapore ranks 11th. Hong Kong is relatively weak in this sub-index, failing to make it into the top 20.
On the “Transaction Process” front, no Asian country/territory made it into the top 20 this year.
Elsewhere in Asia Pacific, India stands out as the top improver in transparency, with enhanced data coverage and quality across property sectors, from industrial to data centres. Australia, cities in Mainland China, South Korea, the United Arab Emirates, and Saudi Arabia also made significant progress in 2024.
Bruce Pang, Head of Research at JLL in Greater China, said: “While Hong Kong has seen its score move higher, there is still room for improvement, particularly in sustainability, which is a key driver of the most transparent markets. Markets such as Singapore and Australia have made legislative efforts to promote sustainability, while the private sector is also actively engaged in sustainability. International investors are increasingly prioritising ESG and sustainability factors as key metrics for assessing long-term value and mitigating risk. Hong Kong must respond actively to this trend by setting more ambitious sustainability targets and promoting green transformation in the real estate industry to continue to attract international capital and maintain its competitiveness.”
Globally, the Index reveals that Europe remains the most transparent region, with highly transparent commercial real estate markets showing the strongest progress. The US, Canada, France, and Australia are among the global top improvers. Over the past two years, these leading countries have attracted over USD 1.2 trillion in direct commercial real estate investment, accounting for more than 80% of the global total, positioning them to lead the cyclical recovery in liquidity as capital market activity increases.
Richard Bloxam, CEO, Capital Markets at JLL, said: “The focus on transparency for investors has never been greater in global real estate markets, especially as external challenges like geopolitical tensions and election cycles draw increased attention in the near term. Looking ahead, additional drivers such as artificial intelligence and higher standards of sustainability obligations and reporting will continue to push investors to seek greater transparency.”
Brian Klinksiek, Global Head of Research and Strategy at LaSalle Investment Management, said: “Highly transparent markets in this year’s Index represent over half of income-producing real estate worldwide. Countries with transparent pricing and fundamentals, particularly across the diverse range of specialty sectors and sub-sectors, are likely to lead the real estate liquidity recovery. Diversification will be critical as the investible universe continues to expand in terms of breadth and complexity.”
Bruce Pang, Head of Research at JLL in Greater China 
Cathie Chung, Senior Director of Research at JLL in Hong Kong
AI and sustainability drive new transparency opportunities and challenges
The rapid proliferation of AI has accelerated expectations for its impact on real estate, influenced by tools like JLL’s AI platform, JLL GPT. It is estimated that over 500 companies currently provide real estate-specific AI services. With significant investment growth, early findings suggest AI will enhance transparency across the industry by reviewing and summarising large volumes of data and analytics, automating building management, and powering urban and architectural design. However, experts and policymakers have raised concerns about the risks of AI. Policies such as the US Executive Order on AI and the recently approved EU AI Act have been introduced to ensure the responsible deployment of the technology and maintain transparency.
Cathie Chung, Senior Director of Research at JLL in Hong Kong, said: “AI is reshaping the global real estate market, driving significant innovation across the industry. In Hong Kong, the government has been actively promoting the development of a smart city and digital governance in recent years, encouraging the adoption of AI technologies in the built and real estate industries, such as Building Information Modelling (BIM) and PropTech. These efforts aim to create a more transparent and efficient business environment, attracting continuous capital inflow into Hong Kong. However, the regulatory and compliance risks associated with these tools are also rising. As new laws and regulations addressing data security, privacy, and other concerns are expected, Hong Kong must pay close attention to global regulatory trends and establish a robust AI regulatory framework to seize the opportunities presented by AI development while effectively mitigating potential risks, ensuring the steady progress of digital transformation and sustainable development in the real estate industry.”
In parallel, sustainability marked the largest improvement in the 2024 Index, as nations race to halve carbon emissions by 2030 to meet the Paris Agreement, and the introduction of mandatory decarbonisation pathways has set new building performance standards, sustainability reporting requirements, and corporate commitments. France, Japan, and the US have emerged as leaders in sustainability by implementing energy performance requirements for both existing and new buildings, energy use reporting, and biodiversity protection and restoration. These markets, with the clearest long-term pathway to more sustainable real estate, will offer the most transparent and predictable environments, allowing occupiers to make decisions with confidence, governments to meet decarbonisation targets, and investors to future-proof their portfolios.
However, despite significant progress, sustainability metrics remain among the least transparent globally. Beyond the most transparent markets, mandatory building performance standards, public disclosure of buildings’ energy use, climate risk reporting, and resilience planning are still limited. The rate of building decarbonisation retrofits will need to triple to align with net zero carbon pathways, while demand for green buildings significantly outstrips supply – only 30% of the demand for low-carbon office space in major global markets is likely to be met by 2030. Looking ahead, sustainability transparency is expected to grow over the next two years across the world’s largest economies, including the US, EU, UK, China, Japan, Korea, Canada, and Australia as new requirements are enacted.
With emerging trends such as technology integration and sustainability, diversification is becoming more prominent as investors seek assets that will benefit most from these long-term themes. This has led to an expansion of the investible universe and a significant reallocation of capital. The share of global investment in the industrial and living sectors has risen from 29% 10 years ago to 50% of global direct investment over the past year. Additionally, institutional investors are increasingly active in emerging asset types such as data centres and lab space.
Debt markets, money laundering, and beneficial ownership are among key transparency themes to watch
Approximately USD 3.1 trillion of global real estate assets have maturing debt between 2024 and 2025, with USD 2.1 trillion of debt requiring refinancing. Roughly 30% of this refinancing has been completed in the first half of 2024. However, monetary authorities have raised concerns about potential risks due to the relative lack of transparency as non-bank lenders expand and complement traditional sources of credit. Historically, commercial real estate lending was dominated by regulated banks, but the lender landscape has broadened to include new credit sources such as debt funds, pensions and insurance companies. This diversification has created a more balanced market but also one with less visibility into financing conditions in many countries, raising new transparency concerns. Alongside debt markets, money laundering and beneficial ownership regulations have emerged as key areas to watch for transparency. New guidance from the Financial Action Task Force (FATF) requires countries to ensure they can track the true ownership of companies. This, combined with expanding financial sanctions regimes, has maintained momentum for improving anti-money laundering (AML) and beneficial ownership (BO) regulations. Despite global efforts, the effectiveness of these regulations remains under scrutiny, as implementation and definitions are often inconsistent and easy to circumvent. Countries such as India, Indonesia, the United Arab Emirates and the US have introduced changes to AML and BO regulations to enhance transparency. Additional regulations are also underway in the US, Singapore, Switzerland, Canada, Australia, and the EU.