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Transparency crucial to UAE real estate sector

Posted by GPG Staff on November 4, 2022

Dubai has been making strides in cementing its position as the region’s top destination for foreign investors, including those on the market for new homes and commercial space.

Recently, Dubai’s real estate market has been ranked the most transparent in the region by JLL’s biennial Global Real Estate Transparency Index (GRETI) 2022, ranking 31st out of 94 cities around the world.

It also landed on the “transparent” tier of the index for the first time, becoming the only property market in MENA to feature in the said category.

Given the number of its initiatives, the emirate has the potential to further improve its ranking and join the group of the so-called “highly transparent” markets, according to Jeremy Kelly, Global Research Director at JLL.

The markets that are considered “highly transparent” by the JLL index include the UK, US, France, Australia and eight others. They are considered open, active private markets as they demonstrate accountability and quality governance. They also account for 80% of global investments into commercial real estate.

“What we’ve seen in Dubai is that it’s moved from ‘low transparency’ [on the index] a decade ago to ‘semi-transparent’ category and it’s now sitting in the ‘transparent’ category for the first time this year,” Kelly said at a briefing hosted by JLL in Dubai.

Higher transparency

Kelly said Dubai can continue to work on providing market data for real estate investors, as well as “regulations and metrics relating to decarbonization and sustainability”, to move higher in the transparency ranking.

Sustainability has recently become a new “marker” of transparency, as stakeholders are now increasingly on the lookout for environmental impact and risks of real estate assets.

With sustainability in mind, Dubai can consider “extending its regulations beyond new buildings” and looking at retrofitting existing property stock to “get buildings firmly on the decarbonization agenda”, Kelly said without further elaborating.

He said the emirate also has a “huge opportunity” to showcase its sustainability credentials at the upcoming Cop28. The UAE will be hosting next year the 28th session of the Conference of Parties (Cop28) to the United Nations Framework Convention on Climate Change, whose goals include sustainability and promoting cooperation to deal with global issues.

JLL’s transparency index is being widely used as a reference guide for developers, investors and occupiers who want to assess the transparency of a real estate market.

Transparency has been linked to higher investment and is critical in ensuring that governments, investors and occupiers make smart decisions.

Dubai is not only the most transparent market in the MENA region. The emirate, along with Abu Dhabi, was recognised as the top global improver in JLL’s transparency index this year.

The improvement has been attributed to several government initiatives that led to greater market transparency.

These initiatives include regulations around market lending practices, beneficial ownership tracking and sustainability reporting.

Dubai has also enhanced its digital services and data provision processes like service charge management, automated valuation and transactions databases through the Dubai Real Estate Self Transaction (Dubai REST) platform.

The Dubai Land Department (DLD) publishes the volume and value of real estate transactions on a daily, weekly and monthly basis.

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