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SE Asia property market shows improved transactions

Southeast Asia registered improvement in property-market transparency across the board this year compared with a 2012 survey, according to the biennial Global Real Estate Transparency Index report by Jones Lang LaSalle (JLL) and LaSalle Investment Management.

All countries in emerging Southeast Asia have seen some advances but less significant than in 2012, when the sub-region accounted for three of the top 10 global improvers.

The sub-region continued to display a wide diversity in real-estate transparency.

Both Singapore and Malaysia were still graded as transparent, with Singapore remaining one of the world's most transparent real-estate markets, ranking 13th globally.

On the other hand, Myanmar, which was covered for the first time in the survey, was among the world's least transparent, ranking 100th among 102 markets surveyed. Thailand, the Philippines and Indonesia continued to be categorised as semi-transparent and Vietnam remained in the low-transparency category.

"Despite no change in grading, Thailand has seen continued improvement in its transparency score. The country's improved score and higher ranking in 2014 are good news," said Suphin Mechuchep, managing director of JLL in Thailand.

Thailand's score improved to 2.76 this year from 2.94 in 2012 and 3.02 in 2010 (the higher the score, up to a maximum of 5, the lower the transparency). The country has also improved its global ranking from 39th in 2012 and 2010 to 36th place in 2014.

"Greater availability of market data contributed to improvement in transparency in Thailand's real-estate market," Suphin said. "This is in contrast with the past when Thailand suffered from a lack of information about real-estate transactions.

"Major sales and leasing transactions in particular were typically kept confidential by relevant parties, be they owners, investors or occupants. As a result, actual transacted values against which to benchmark were scarce," she explained.

"The growing number of listed real-estate developers, investors and property funds counts for a lot in this aspect, as they are required by law to be transparent," Suphin said.

"For example, the number of property funds that trade on the SET [Stock Exchange of Thailand] grew from 38 in 2012 to 48 at present. These listed vehicles are subject to strict governance and regulation, as well as regular and standardised reporting, thus providing more transparency to Thailand's real-estate market.

"This trend is being reinforced by the introduction of REITs [real estate investment trusts] in Thailand, which will gradually supplant the current property funds. REITs allow for investment in more asset types, such as hospitals, educational facilities and institutions and golf courses," she said.

Chua Yang Liang, head of research for Southeast Asia at JLL, said continuing institutional interest in this region would help to drive rising transparency in the regulatory and legal environment as well as the transaction processes.

He cited recent interest by institutional players such as the General Insurance Corporation of India (GIC Re), Goldman Sachs and Ascendas in the Philippines, and institutionalisation of the property market in Thailand as examples.

Chua also expects a young population in Southeast Asia, with higher education and increasing usage of social media, to push for greater real-estate transparency.

JLL's latest Global Real Estate Transparency Index reveals continued progress over the past two years. More than 80 per cent of markets have registered an improvement since 2012, although increases in most markets have been slow but steady.

Of the 102 markets covered by the index, 14 saw a significant improvement in their overall score.


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