How transparent is the ‘Alternatives’ sector?
Global Real Estate Transparency Index, 2018
Alternative property sectors – from self-storage and data centres to student and senior accommodation – have become part of the mainstream in the world’s most mature property markets. As a result, there are demands for new types of data from investors, with questions emerging around the transparency of market information in a range of niche sectors.
‘Alternatives’ go mainstream
The ‘alternatives’ sector represents one of the last frontiers of real estate transparency. The sector is increasingly popular with investors, with an active alternatives market in around one-third of the 100 markets covered by the Index.
But, even in ‘Highly Transparent’ countries, data on rents, inventory and pricing can be scarce, while coverage differs greatly between niche sectors in the same market. On the spectrum of alternative property types, senior and student housing are the most transparent. In leading markets, specialist REITs focusing on these property types are established and account for 16% of the listed real estate universe pioneering transparency in their fields.
The ‘Alternatives’ Transparency Spectrum
Source: JLL, LaSalle Investment Management
Alternatives driving transparency forward in next two years
Transparency around ‘alternatives’ is improving, as new data is collected, new methods of ‘scraping’ data are utilised and niche property type associations work more closely with real estate data and research providers shining new light on previously opaque sectors.
There is plenty of room for improvement, however, in both transparent and opaque markets. We anticipate that the ‘alternatives’ sector will be among the most dynamic drivers of change in the Index over the next two years. A positive feedback loop is now in motion, with improved information stimulating new investment, which in turn is creating fertile ground for new surveys, data collection and subscription data services.