6 minute read
Real Estate Transparency: Global metrics assess
from CPM August 2022
by MediaEdge
OPEN
CREDENTIALS
CANADA RETAINS its fifth place ranking and its status as a highly transparent real estate market in JLL’s newly released biennial survey of key drivers of investor confidence. For 2022, the Global Real Estate Transparency Index evaluates 94 countries and 156 urban regions on 254 metrics related to regulatory certainty, market governance, transaction oversight, data availability and ESG factors, drawing on both quantitative and qualitative evidence.
“We believe that a robust global benchmark is an essential tool for the real estate industry,” asserts Richard Bloxam, JLL’s Chief Executive Officer, Capital Markets. “Transparency is the foundation which allows corporate occupiers, investors and lenders to operate and make decisions with confidence.”
He tallies “geopolitical conflict, the climate emergency and wide scale changes in how we live and work, together with mounting economic pressures” in the defining backdrop of this year’s results. Those are conveyed via composite scores in range of 1 to 5 — with 1 being the highest possible score — and a further breakdown into six variously weighted sub-categories.
The five most transparent markets are all repeats from 2020. The United Kingdom tops the list with a score of 1.25. France and the United States come next with matching scores of 1.35, followed by Australia at 1.38. Canada’s composite score of 1.44 is a 0.07 improvement since the 2020 analysis and one of the 10 largest gains achieved across the database.
Seven other countries — the Netherlands, Ireland, Sweden, Germany, New Zealand, Belgium and Japan — also rank in the highly transparent tier with scores ranging
from 1.54 to 1.88. Finland’s score of 1.96 earns it the top place among the 22 countries in the second tier of transparent markets, which ends with Thailand’s score of 2.63.
Investment performance measurement and the country’s regulatory environment are weighted most prominently among the sub-categories, together accounting for 48.5% of the composite score. Other transparency considerations hinge on tracking of market fundamentals, monitoring of transaction processes, governance of listed investment vehicles and sustainability reporting.
Canada’s highest rank is third in the regulatory and legal sub-category, which includes considerations such as real estate tax, land use planning, building controls, property registration, enforceability of contracts and debt regulation.
Its lowest rank is 10th in transaction processes, which includes considerations such as pre-sale information, professional standards for agents, bidding processes and regulations to address money laundering. Interestingly, Canada actually outperformed its composite score in this sub-category, with a score of 1.20. However, five countries — the U.K., France, Ireland, Denmark and New Zealand — attained perfect scores of 1.
Four countries — the U.S., Australia, the U.K. and Ireland — likewise achieved the highest possible score for governance of listed investment vehicles, a category in which Canada was ranked eighth with a score of 1.17.
Leaders fell farthest from the mark for availability of data about market fundamentals, which the U.S. bested with a score of 1.48, and sustainability reporting, where France and the U.S. registered matching top scores of 1.70.
Comparisons of the 20th ranked scores reinforce the discrepancies between some of the sub-categories. Notably, the best 20th placing is Belgium’s 1.46 for transaction process; the worst is Slovakia’s 3.08 for sustainability.
Canada placed fourth in the sustainability sub-category with a score of 1.90, just behind the U.K.’s 1.80 and one notch ahead of Australia’s 2.10.
“The sustainability transparency subindex is the lowest scoring within the survey on average,” JLL analysts confirm. “Beyond the leading markets, there is still low implementation of mandatory standards in areas such as building resilience standards and emissions reporting, as well as in the uptake of green leases and financial performance tracking. The regulatory environment and industry practice around measuring and
benchmarking
reporting sustainability metrics is also highly fractured across jurisdictions and companies, making it even more difficult to navigate.”
Meanwhile, JLL analysts cite recent Canadian initiatives that complement burgeoning investor interest in alternative asset classes and sustainability.
“In Canada, higher-frequency and nontraditional data has become more available, while the national government’s move towards TCFD (Task Force on Climaterelated Financial Disclosures) aligned company reporting and a beneficial ownership registry have also been supplemented with plans to drive higher sustainability standards, like Toronto’s Transform to Net Zero strategy and Vancouver’s Zero Emissions Buildings plan,” they observe. zz More information about the JLL Global Real Estate Transparency Index can be found at www.us.jll.com/en/trends-and-insights/research/ global-real-estate-transparency-index.
CANADA EXCELLING AT FOSTERING TECH TALENT
Eight Canadian urban centres rank in CBRE’s recently released analysis of the top 50 North American markets for fostering tech talent and related economic growth. Toronto attains the highest placing among Canadian contenders, deemed to be offering the third best combination of factors that attract a skilled workforce and provide employers with human resources and competitive economic attributes.
That’s a one-notch ascent from the 2021 rankings to exchange places with Washington, D.C., which dropped to 4th this year. Among the remaining top 5, the San Francisco Bay Area and Seattle are unmoved in first and second, while Metro New York continues in the fifth spot.
Toronto now has the third largest tech workforce of the five top markets — 289,700 — after posting 44% employment growth in the years between 2016-2021. While San Francisco Bay (379,000) and Metro New York (344,500) surpass that in sheer numbers, they recorded more modest respective gains of 12.6% and 2.6% during the same period.
Vancouver cracks the top ten for 2022, rising three positions to eighth place, while Ottawa and Montreal make the top 20 at 13th and 15th respectively. Waterloo Region (24th), Calgary (28th), Edmonton (35th) and Quebec City (39th) fill out the Canadian complement.
Additionally, Halifax, London, Ontario and Winnipeg are identified as part of the “next 25” emerging North American markets — ranked ninth, 10th and 12th for their tech growth potential. Notably, London, with a total of 13,700 tech-related jobs in 2021, boasts 99% growth in the sector’s workforce during the previous five-year period.
Canada accounts for about 1 million or slightly more than 15% of the 6.5 million tech jobs in the two countries. Comparatively, the sector has more economic impact in Canada, representing about 6.4% of the national workforce versus 3.9% in the United States. Toronto, Vancouver, Ottawa and Montreal collectively host more than 635,000 tech jobs, while Waterloo Region, Calgary, Edmonton and Quebec City are home to nearly 133,000.
Last year, Toronto and Vancouver recorded the largest number of tech job gains among the 50 top markets. Toronto also added the most positions — 88,900 — in the years between 2016 and 2021, while Vancouver saw the third most new jobs, at 44,640. Nearly 45% of Toronto’s added tech contingent, equating to 39,700 jobs, was hired during the COVID-19 pandemic — another list-leading statistic over the course of 2020 and 2021.
Ottawa, Toronto and Waterloo Region make the top five for quotient of their workforces holding tech-related jobs. Ottawa leads that list with 11.6% of its total employment in the tech sector, slightly ahead of the San Francisco Bay area with 11.4%.
“This sizeable concentration of highly skilled workers offers an environment conducive to innovation,” the report submits.
The Scoring Tech Talent report can be found at www.cbre.com/insights/books/scoringtech-talent-2022.
