JLL and LaSalle Investment Management’s 2016 Global Real Estate Transparency Index (GRETI) has increased Saudi Arabia’s standing to “Semi-Transparent” after recent efforts by the Chambers of Commerce in Saudi Arabia.
“The formation of real estate committees in the Chambers of Commerce has highlighted the issue of low transparency in the market and encouraged more action towards addressing the issue. As a result there has been some mild improvement in ‘open data’ platforms such as registering property transactions with the Ministry of Justice which is then shared publicly on its website. With the influx of international developers, real estate consultants have also entered the Saudi Arabian market, leading to an increase in coverage of the market,” Jones Lang LaSalle said in its MENA regional overview of the list.
Higher real estate transparency is associated with stronger investor and corporate real estate activity.
The “Semi-Transparent” category is dominated by large emerging markets, including the BRIC countries (Brazil, Russia, India and China) and all four of the fast-growing MIST economies (Mexico, Indonesia, South Korea and Turkey), according to Arabian Business.
Jamil Ghaznawi, country head of JLL Saudi Arabia called the report “very good news for Saudi Arabia.”
“Moving into this category for the first time shows the advances the kingdom is making and is an indication of the focus the country has on strengthening corporate governance, transparency and market data.”
Saudi Arabia also was tops in the GCC behind Dubai, which has retained its position as the most transparent market in the MENA region, recording continued progress. Bahrain was ranked 67th, Kuwait 73rd, Qatar 74th and Oman 89th out of 109 markets analyzed.
Regional rival Iran was added to the list this year for the first time, “reflecting increased interest among international investors, developers and occupiers.”
Earlier this month, Saudi Arabia’s housing minister announced plans to build over one million homes as part of economic reform plans. One facet of the National Transformation Program “sets targets for government agencies and includes spending on new initiatives across various sectors, [and] includes building 1.5 million homes over the next seven or eight years,” Reuters reported.
Housing Minister Majed al-Hogail said Saudi Arabia will “offer foreign and local property developers partnership deals in a vast housing construction program to reach that target.”
Saudi Arabia imposed a tax on empty land plots – known commonly as the “white land tax” – last year. The Kingdom is expected to issue regulations detailing the law’s planned implementation within the next two weeks, according to reports.