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Thailand real estate market shows continued transparency improvement
A biennial index released by Jones Lang LaSalle and LaSalle Investment Management reveals that recovering real estate markets have prompted renewed impetus to transparency improvements following a slowdown in progress during the financial crisis in 2008 and 2009. Nearly 90% of markets have registered advances in real estate transparency during the past two years, driven by improving market fundamentals data and performance measurement, combined with better governance of listed vehicles.
The 2012 Global Real Estate Transparency Index, a proprietary Jones Lang LaSalle survey that calculates transparency in 97 real estate markets worldwide by weighting 83 different factors, provides investors and corporate occupiers with data and analysis critical to transacting, owning and operating in global markets. The Index also assists governments and other industry organizations interested in improving transparency.
In the 2012 report, Thailand ranked 39th among the 97 markets covered. While this ranking was the same as in the 2010 report, the Kingdom’s real estate market showed continued improvement in transparency score. The scores in the Global Real Estate Transparency Index range between one and five, with one representing the highest level of transparency and five being opaque. Thailand’s real estate transparency score improved to 2.94 in 2012 from 3.02, 3.16 and 3.40 in 2010, 2008 and 2006, respectively.“Higher transparency in the country’s capital markets, specifically in relation to real estate, continued to be a major factor in improving real estate transparency”, said Suphin Mechuchep, Managing Director of Jones Lang LaSalle in Thailand.
“The number of companies listed under the Property Development sector on the Stock Exchange of Thailand rose from 60 in 2010 to 63 at present while the number of property funds which trade on the SET grew from 26 to 38 over the same period. These listed vehicles are subject to strict governance and regulation, as well as regular and standardized reporting, thus providing more transparency to Thailand's real estate market. This trend is being reinforced by the introduction of REITs into Thailand this year, which will allow for investment in more asset types, such as hospital, education and golf course,” she explained.
Chris Fossick Managing Director of Singapore and South East Asia, Jones Lang LaSalle commented: “The real estate markets in South East Asia have made significant inroads in improving their transparency over the past two years. Three out of the top 10 improvers globally are from this region – The Philippines, Indonesia and Vietnam. All three countries have improved on the back of greater availability of market data and changes in the regulatory and transaction processes. With the exception of Vietnam, most South East Asia markets are either in the transparent (Singapore and Malaysia) or semi-transparent band (The Philippines, Thailand and Indonesia). This finding is echoed by the recent rise in direct foreign investments (FDI) into the ASEAN especially into Indonesia and the Philippines. The rise of FDI into ASEAN is testament of global investors’ confidence of the long term growth potential in this region.”
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