JLL has just issued its bi-annual Global Real Estate Transparency Index 2014, and the findings are highly encouraging for rising secondary markets in the U.S. like Nashville. The report quantifies real estate market transparency in 102 markets, helping investors and occupiers understand crucial differences between various countries across the globe.
As in the past, the world’s most transparent markets continue to be dominated by the highly liquid English-speaking regions, with the United Kingdom, the United States, Australia and New Zealand occupying the top four slots and Canada ranking sixth.
The U.S. actually slipped one spot to No. 2, but the report emphasizes that the difference between these top markets is marginal, and each has been jockeying for top position over the past decade.
A key message is that the U.S. continues to be viewed as a safe, open place in which to invest. At the same time, more investors are selectively extending their footprints into secondary U.S. markets now that investment activity across much of the globe has returned to pre-recession levels.
Nashville is increasingly targeted by both domestic and foreign investors due to its dynamic economy and strong job growth (Nashville’s net job gain ranked No. 2 in the nation in 2012 and No. 6 in 2013). Nashville, like other secondary markets, also delivers higher yields than primary markets such as New York City and San Francisco. International investment so far this year in Nashville includes the purchase of Vista Germantown, a 242-unit apartment complex, by Avison Young in April, marking the Canadian investor’s first acquisition in the Nashville market.
Overall, 80 percent of global markets registered transparency gains since 2012, including modest transparency improvement in the U.S, according to the JLL transparency report.
The report also emphasizes that a growing culture of open data and technological innovation has emerged as a new driver of greater transparency across the globe, a trend that will likely continue into the next survey in 2016. Other key drivers spurring enhanced transparency include:
- The ongoing increase in cross-border investment is accelerating the pace of change as multinational companies and international real estate advisors extend their global footprints.
- Economic growth and improving market fundamentals allow governments and the real estate industry to refocus on transparency issues that were placed on the back burner during the global financial crisis.
- The “Millennial” generation is demanding more transparency and accountability, strengthened by the power of social media.
- The wider adoption of sustainability tools–minimum energy standards, green building rating systems and financial performance measurement of sustainable buildings–means sustinability is an increasingly visible business differentiator.