Canada is once again ranked fifth and deemed to be highly transparent in JLL’s biennial survey of openness, integrity and credibility in global real estate markets. The newly released Global Real Estate Transparency Index assesses 89 countries on 256 factors that fall into six variously weighted broad categories contributing to the composite score.

Countries are assessed for the availability, reliability and standardization of information that investors can obtain to make decisions, and for the regulatory/legal governance and vigilance against nefarious players in those markets. This includes quantitative and qualitative data related to market performance, market fundamentals, transactions and ESG. Scores range from the possible best of 1 to the bottom end of 5.

For 2024, Canada’s score of 1.49 has it sharing the fifth slot with the Netherlands. The United Kingdom tops the list with a score of 1.24, followed by France (1.26), the United States (1.34) and Australia (1.37). Another seven countries — New Zealand, Ireland, Sweden, Germany, Japan, Belgium and Singapore — are also categorized as highly transparent, while 22 countries are grouped in the transparent tier, just below.

The report notes that countries in the highly transparent tier have collectively attracted about 80 per cent of global direct investment in real estate during the past two years, equating to about USD $1.2 trillion. It also tallies a number of coalescing trends that are fueling demand for verifiable data that can enable comparison of assets within and across markets and/or provide proof of compliance.

Real estate investment continues to shift away from traditionally predominant asset classes. Last year, 50 per cent of global direct investment was directed to the industrial and “living” sectors — the latter which now encompasses a range of options beyond multifamily rental accommodations — up from 29 per cent 10 years earlier. JLL identifies 14 emerging sectors, also including data centres, life science labs, self storage and cold storage, that are well positioned to capture a growing share of investment.

“Transparency and information on operating and pricing fundamentals in many niche parts of the market is rising but remains considerably lower than in more established property types, with over one third of markets lacking any reliable data outside the ‘core’ sectors. While institutional investors are selectively active in these sectors across a broad set of markets, the ‘highly transparent’ countries account for the majority of stock and highest-quality data, positioning them to capture an outsized share of diversification benefits,” the report states.

At the same time, analysts foresee regulatory demands for more transparency around the range of non-bank lenders gaining prominence in the market. That’s in step with international momentum on anti-money-laundering (AML) and the rise of ESG reporting mandates.

Although static in the index rankings since 2022, Canada is flagged for its top-10 margin of improvement over its previous score. Cited transparency gains in the intervening two years include new federal legislation related to disclosure of beneficial ownership, a pending move to require select companies to align their reporting with the Task Force on Climate-related Financial Disclosures (TCFD) and Montreal and Vancouver’s new requirements to report greenhouse gas (GHG) emissions from buildings. Canada is also commended for deepening data availability pertaining to both core and alternative property sectors

In an associated commentary, Jacques Gordon, executive in residence with the MIT Center for Real Estate and formerly a global strategist for LaSalle Investment Management, reflected on the evolution from “data scarcity to data abundance” since the transparency index was launched 25 years ago — making data quality and management the new pressing priorities.

“Higher levels of transparency do not eliminate volatility, even though they often reveal it,” he reiterated. “A transparency index score or ranking is no substitute for learning a market through direct experience, transactions and on-the-ground observation. However, it can be an excellent starting point to see what to expect when venturing into different countries or cities for the first time.”