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Saudi Arabia improves real estate transparency

Saudi Arabia improves real estate transparency

July 2016

JLL’s Global Real Estate Transparency Index ties transparency to real estate investment, business activity and living standards.

 

 

 

The Kingdom of Saudi Arabia (KSA) has moved up the rankings to finish in the ‘Semi-Transparent’ category for the first time in the JLL and LaSalle Investment Management’s 2016 Global Real Estate Transparency Index (GRETI).

Strong advances over the past two years have seen Saudi Arabia (63rd) and Egypt (65th) move into the dynamic ‘Semi-Transparent’ group, which is largely dominated by large emerging markets.

“This is very good news for Saudi Arabia,” said Mr Jamil Ghaznawi, National Director and Country Head of JLL Saudi Arabia. “Moving into this category for the first time shows the advances the Kingdom is making and is an indication of the focus the country has on strengthening corporate governance, transparency and market data.”

A number of key factors are driving progress and frame the broader issues raised by both high and low transparency:

  • Capital allocations to real estate are growing. JLL forecasts that within the next decade in excess of USD 1 trillion will be targeting the sector, compared to USD 700 billion now. This growth means investors are demanding further improvements in real estate transparency.
  • There is a growing recognition that transparent real estate practices play a significant role in capital formation, municipal finance, and as a foundation to improve the quality of life in many communities.
  • Technology is both a driver of the digitisation of all kinds of real estate data and also an enabler in disseminating and analysing this data; improvements in data capture techniques are allowing a more granular and timely assessment of real estate markets.

The formation of real estate committees in the Kingdom’s Chambers of Commerce has highlighted the issue of low transparency in the market and encouraged more action towards addressing the issue. As a result, there has been some mild improvement in ‘open data’ platforms such as registering property transactions with the Ministry of Justice which is then shared publicly on its website.

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