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Singapore ranked most transparent real estate market in Asia

Singapore has been ranked the most transparent real estate market in Asia, according to the Global Real Estate Transparency Index 2014. It maintained 13th place, while Hong Kong slipped from 11th to 14th.

SINGAPORE: Singapore has been ranked the most transparent real estate market in Asia. This is according to Global Real Estate Transparency Index 2014, published by consultancy firm JLL. Overall, the top positions are still dominated by markets in the west.

Singapore maintained its 13th place in the index. But with Hong Kong slipping from 11th in 2012 to 14th in the latest report, it has pushed Singapore to top position among Asian real estate markets. The top position in Asia has usually been held by Hong Kong since the report was first launched 15 years ago.

JLL said Hong Kong was dragged down by lower scores in the area of property taxation relating to cooling measures and also in accounting standards and corporate governance.

This is the second time Singapore has been ranked higher than Hong Kong since the index was published in 1999.

However, when compared to other mature markets like the UK, US and Australia, JLL said Singapore did not fare as well in terms of transaction process. But Singapore was in the global top 20 for performance measurement, market fundamentals, governance of listed vehicles and regulatory and legal sub-indices.

Chua Yang Liang, head of research at JLL Singapore, said: “In other markets, the tenants have the ability to look the components within that service charge. In Singapore's case, it is typically a broad number and tenants typically do not have the ability to audit.

"The other one is the market fundamentals in terms of the time series, the depth of the data, we have strong series, quite long - but in terms of depth of the details like building information, building profile, that kind of details that are publicly available are still lacking compared to other mature markets."

JLL said improvements in transparency in Asia Pacific have been steady but unspectacular.

This year, the report also covered Myanmar, which emerged as one of the least transparent real estate markets globally, ranked 100.

Analysts said investors generally tend to favour more transparent markets. Donald Han, managing director of Chestertons, said: "If they are risk-averse, they would need to put more allocation to more mature transparent markets, but these markets would generate lower returns. In some cases, it could be 3 to 4 per cent in terms of yield.

“Myanmar is more opportunistic currently. Potentially, it would have higher returns. I would even expect double-digit (returns) because of the unpredictability in government regulation."

Looking ahead to 2016, JLL said several factors could boost transparency. They include new technologies, greater use of social media, more knowledge-sharing as well as increasing demands for transparency from government and commercial organisations. 

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