To unlock more global capital, Apac real estate markets need to continue building on transparency
Improving transparency reduces risk, opens a wider array of opportunities to investors looking for growth
THERE are clear signs that global real estate is embarking on a new cycle. Buoyed by recent interest rate cuts and bullish sentiment, more deals will close as investors look to pair dry powder capital with promising investments into the final quarter of 2024 and beyond.
Recent data provides us with a high degree of confidence. Asia-Pacific’s (Apac) investment volumes for the third quarter of 2024 surged 82 per cent year on year, hitting US$38.8 billion.
While these numbers reinforce the fundamental strength of the region, Apac has only received 6 per cent of global real estate investment since 2022.
Pulling this together, Apac stands at the cusp of a transformative era. However, for it to unlock more global capital, the region will need to continue building on its real estate transparency.
Apac and Singapore’s rise to prominence
In the 2024 Global Real Estate Transparency Index (GRETI) by JLL, Apac recorded the strongest average transparency improvements globally since 2022. This progress comes at a critical juncture, as institutional investors worldwide seek diversification and growth opportunities beyond traditional markets.
Singapore’s entry into the ‘Highly Transparent’ tier is a watershed moment, symbolising the region’s commitment to world-class standards. This achievement is underpinned by higher sustainability standards and a focus on integrating technology and digital services through initiatives like its Real Estate Industry Transformation Map. But Singapore is not alone in its ascent.
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Traditional heavy hitters in Apac such as Japan and Australia have also seen rising scores. These have been driven by new ESG and climate disclosure requirements, updated construction standards, and deeper data availability across both core and alternative property sectors. These improvements are crucial as sustainability and technological integration become increasingly central to investment decisions.
Perhaps most striking is India’s emergence as the top global improver in transparency. Greater data coverage and quality across sectors – from industrial to data centres – reflect the country’s rapid institutionalisation. Combined with streamlined building regulations, digitised land records, and new climate risk disclosure guidelines, India’s leading cities have entered the ‘Transparent’ tier, signalling their readiness for increased global investment.
China, despite facing challenges in its property sector, has made notable progress in its top-tier cities. A new unified land registry system, evolving Reit and private equity fund regimes, and improved market data have boosted transparency in Shanghai and Beijing. These advancements are critical for the world’s second-largest economy as it seeks to attract more diverse international capital.
South Korea, too, has emerged as a major improver, supported by a growing Reit market, enhanced data availability, and new Zero-Energy Building regulations. With sustainability reporting aligned to Task Force on Climate-related Financial Disclosures (TCFD) standards set to take effect next year, South Korea is positioning itself as an increasingly attractive destination for global real estate capital.
A global shift in investment patterns
This wave of improvements across Apac is happening against a backdrop of shifting global investment patterns. As demographic changes, technological integration, and evolving occupier preferences redefine growth prospects, investors are increasingly focused on markets that can offer both transparency and long-term structural growth.
The numbers tell a compelling story. Apac’s top improvers – including India, China’s leading cities, and South Korea – along with more established markets like Japan, Australia, Hong Kong and Singapore, offer strong long-term prospects. These markets will require a significant expansion of urban infrastructure over the coming decade.
This stark contrast between future potential and current investment levels highlights the scale of the opportunity as transparency continues to improve. As these markets align more closely with global standards in areas such as sustainability reporting, data availability and regulatory clarity, they are set to unlock significant inflows of international capital.
Benefits beyond investment
For global investors, Apac’s improving transparency reduces risk and opens a wider array of investment opportunities. The region’s economic dynamism, coupled with its rapidly expanding and increasingly sophisticated real estate markets, offers a compelling alternative to slower growing, more saturated markets elsewhere.
For Apac governments and industry players, the message is clear: Continued focus on transparency is key to attracting global capital. This means not just improving data availability and quality, but also strengthening regulatory frameworks, enhancing sustainability standards, and embracing technological innovation in real estate practices.
The benefits extend beyond attracting foreign capital. More transparent real estate markets support better decision-making, reduce corruption, enhance public trust and contribute to more sustainable urban development. As Apac cities continue to grow and evolve, improved real estate transparency will be crucial in ensuring this growth is sustainable, equitable and resilient.
Towards a new focal point
While the leading markets in Apac have made significant strides, there is still a transparency gap with the most advanced global markets. Continued effort will be needed to address areas such as data consistency, regulatory enforcement and the adoption of global best practices across all aspects of real estate.
Looking to the future, the trajectory is clear. The convergence of improving transparency and the region’s inherent economic dynamism creates a powerful proposition for international capital.
As transparency continues to improve, we can expect to see a significant reallocation of global real estate capital towards Apac in the coming years.
The opportunity is immense, but so too is the responsibility. As Apac markets welcome this influx of global capital, maintaining the momentum on transparency improvements will be crucial. Only by continuing to raise standards, embrace innovation, and align with global best practices can the region fully capitalise on this transformative opportunity.
The stage is set for Apac to become the new focal point of global real estate investment. The question now is not if, but when and how dramatically this shift will unfold. Those who recognise and act on this trend early stand to reap significant rewards in what promises to be an exciting new chapter for global real estate.
The writer is global lead, International and Strategic Capital, Capital Markets at JLL
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