Middle East lags on real estate market transparency

While transparency has increased in most markets in the Middle East and North Africa (MENA) over the past two years, the region continues to experience lower levels of transparency than other parts of the world.  This is revealed by Jones Lang LaSalle’s new Global Real Estate Transparency Index for 2012 that was released this week.

This improvement is encouraging because transparency is important to both investors and occupiers of real estate. Put most simply, the more transparent a market, the more informed decisions can be made and the lower the risk premium. More transparent markets will therefore attract higher levels of sales activity.

Dubai is the most transparent of the 15 markets covered across the Middle East and North Africa, and ranks in the semi-transparent category at the global level. Despite the best efforts of RERA (the best in class real estate regulator in the region) and the DIFC’s role as the preferred listing vehicle for REIT’s, the level of improvement since 2010 has been disappointing.

Elsewhere in the region, Lebanon stands out as the most improved market over the past 2 years, while Egypt is the only one of the 97 markets covered globally where transparency has actually declined since 2010.

As policy makers have recognised the need to improve transparency to attract increased foreign investment into the region, further forward progress is likely to be made by the time we undertake our next survey in 2014. This will be a positive factor, increasing the attraction of the real estate market to both occupiers and investors.