CEE REGION Poland still the most transparent CEE market

The top ten in the ranking are classified by JLL and LaSalle as ‘high transparency’, while those in the next 23 places are classified as ‘transparent’ The Polish market retained 20th place in the ranking of 99 countries, but with a score sliding back from 2.15 in 2018 (the last time the ranking was published) to 2.24 this time. The next highest rated in the CEE region, the Czech Republic, also registered a lower score (down from 2.26 to 2.41) and dropped two places to 25th. Hungary and Slovakia took 27th and 28th places respectively (swapping positions from 2018) but with moreorless the same score – 2.44.

The strong foundations of the Polish real estate market are confirmed, among other factors, by the high level of investor activity, which can still be seen despite the global turmoil wrought by the coronavirus pandemic. So far in 2020, the real estate investment market has seen transactions valued at more than EUR 3.7 bln. This illustrates the continued trust and confidence of investors. The continuation of work on improving the legislative climate, the better cooperation between the private and public sectors, and increasing innovation means that Poland could be ranked higher in two years’ time.
Agata Sekuła, the vice-president of JLL Poland

The biggest move downwards in the CEE region was by Romania, slipping from ‘transparent’ to ‘semi-transparent’ and by six places to 35th with a score of 2.71 (2.49 in 2018). Russia retained 38th place with a slightly worse score of 2.81. Bulgaria, however, recorded the best improvement, leaping seven places to 42nd (from 3.11 in 2018 to 2.87). Croatia, meanwhile, fell back two places to 46th but with a marginally better score of 3.00, as did Slovenia by a greater margin (3.06 to 3.32 – a fall of four places to 50th) along with Serbia (3.11 to 3.35 and down eight places to 54th).

Ukraine scored only slightly better with 3.80 and was still in 69th place, within the ‘low transparency’ category; while the least transparent country in the region, remains Belarus, which nevertheless moved up four places to 84th with a marginally better score of 4.30, but still in the ‘opaque’ class.

The authors of the report, however, stress that we are currently going through the slowest rate of transparency improvement since the period directly following the Credit Crunch.

The top places in the index were dominated, once again, by Anglo-Saxon countries. The top spot was retained by the UK with a score of 1.31 (1.24 in 2018), followed by the United States (1.35), improving its score slightly from 2018 and swapping places with Australia (1.39 – down from 1.32 in 2018).

The 2020 Global Real Estate Transparency Index covers 99 countries and territories and 163 cities. The latest Index is based on 210 indicators, having been extended to include additional data on sustainability and resilience, health and wellness, proptech and alternatives. These variables are divided into six areas: performance measurement, market fundamentals, governance of listed vehicles, regulatory and legal frameworks, transaction process and environmental sustainability.

The pandemic has strongly emphasised the role of modern technological solutions, thanks to which companies have maintained their business continuity and can now return to office buildings without any major obstacles. Therefore, the coming months and years will be marked by increased spending on innovation, such as in the area of proptech, thanks to which real estate will become even more secure for its users. Another interesting aspect is the increased importance of sustainable development. Global climate change has been temporarily overshadowed by the coronavirus, but we must remember that consistency and long-term strategies aimed at environmental protection are particularly important in this area. These two issues should be the focus of investors and developers who are active on the real estate market in Poland.
Mateusz Polkowski, the head of research and consulting at JLL Poland