German real estate industry “transparent”, but must try harder - JLL
The latest edition of property broker JLL’s Global Real Estate Transparency Index sees Germany in 12th position among 102 countries surveyed – the same position as in the last survey two years ago. This must surely be a big improvement on where Germany was, say, 10 years ago, but Germany’s ranking two years ago was actually downgraded from the top tier of ten markets (“very transparent”) after the researchers’ evaluation criteria were amended.
While the positive news is that the German IPD-Index is now being given an upgraded weighting for benchmark purposes, Germany’s relatively poor overall ranking is largely due to what the researchers describe as a deficit in the transparency of Germany’s stockmarket-listed property companies compared to their international peers. Points were earned, however, for improved valuation methodologies and access to market data, although criticism was voiced about market data outside Germany’s Top 7 cities. Also singled out for praise was an improved level of available information about building and planning regulations, including better availability of relevant information online.
According to Helge Scheunemann, JLL’s head of research in Germany, “On an international basis, the transparency offered by Germany’s listed property companies is still lagging the relevant standards. Even INREV’s Index for non-listed funds is not given sufficient respenct in Germany. Also, the complexity of Germany’s tax code and the availability of concrete data relating to property lending or actual purchase prices lead to a moderate rating, at best.”As to methodology, the criteria in the 2014 Transparency survey are largely unchanged from the measuring criteria of two years ago. The Index is based on 115 separate criteria Germany finds itself back in the second tier of countries (“transparent”), along with countries such as Switzerland, Sweden and Singapore, but behind countries such as the Netherlands, France and Ireland, which earn the top rank of “very transparent”). Top of the list for transparency, according to the JLL rankings, is the UK, followed by the USA.
Among the top European improvers are Romania, Serbia, Hungary and Kazakhstan. In particular, the researchers note, the EU accession talks in Romania and the enforcement of new EU legislation is helping to alleviate corruption and improve the judicial system.