Japan Climbs to 11th in Global Real Estate Transparency, Excelling in Sustainability

Japan has moved up to 11th place in Jones Lang LaSalle’s global real estate transparency index, with notable improvements in sustainability. The country’s tighter environmental regulations, including mandatory climate risk disclosure and insulation requirements, helped propel its rise in the rankings.

Japan’s Real Estate Transparency Improves with Strong Sustainability Scores but Lags in Transaction Processes

Jones Lang LaSalle, a real estate services company, released its transparency index on September 5. The index ranked Japan as the 11th-best country in Asia. Japan's performance was notably impressive in the area of sustainability, per Nikkei Asia.

The ratings are determined by three factors: the availability of data on market fundamentals, such as rents and vacancy rates, transaction transparency, and the promotion of environmentally responsible construction. In addition to Japan, which advanced one position from the previous report in 2022, Singapore ranked 13th and became a member of the "highly transparent" category for the first time.

Japan's ascent was significantly influenced by its improved sustainability score this year. It advanced from sixth to second in the category due to more stringent environmental regulations, which included mandatory climate risk disclosure and insulation requirements for newly constructed residences.

However, the nation languished in 33rd place in the "transaction process" category due to inadequate disclosure regarding rental contracts and service charges. It also needs to catch up to other high-ranking markets regarding the availability of detailed market data and the governance of listed vehicles.

"It's crucial to improve transparency using technology, such as real-time visualization of office usage and in-office work rates," said Yuto Ohigashi, senior director of research at JLL in Tokyo.

Europe Dominates Real Estate Transparency Rankings as India and Middle Eastern Markets Show Growth

Seven of the top 13 positions were occupied by Europe, with the United Kingdom and France securing the first and second positions, respectively. This year's report encompassed 151 cities and 89 countries and regions.

JLL attributed India's most significant increase in transparency scores to its streamlining of construction regulations and digitalization of land registry data, which have been implemented in anticipation of future growth as the country intensifies urban development projects. Technology also enhanced the scores of Middle Eastern markets in Saudi Arabia, Dubai, and Abu Dhabi.

According to Ben Breslau, JLL's chief research officer, investor capital has been directed toward exceedingly transparent real estate markets in light of the elevated risks associated with economic volatility.