In our last blog of this series, we talked about how data transparency is essential for enabling the building owners and managers to track, benchmark, and improve building performance. It is also required to build a business case for investors and internal decision-makers. We also highlighted the problems (‘Viruses’) in the built environment industry that lead to a lack of data transparency.
Now, we are back with some analysis to understand where the worlds stand in terms of data transparency in the built environment, what policies are proving to be impactful, and what factors are leading increased adoption of data transparency in countries around the world.
The 10 countries that top the Global Real Estate Transparency Index, 2020, according to Jll and Lassle Global Real Estate Transparency index report, are:
So, what can we learn from these countries? The report highlights the following:
The top-performing ‘Highly Transparent’ markets are driving higher standards
Transparency has been boosted in the top-ranked, highly transparent markets like the UK, the US, Australia, by a combination of Proptech and new data, sustainability initiatives, anti-money laundering regulations, and enhanced tracking of alternatives sectors.
Top improvers are concentrated in South and Southeast Asia
South and Southeast Asia have led advances globally. India has registered one of the largest improvements globally, with progress in the country’s REIT framework attracting greater interest from institutional investors.
In Southeast Asia, Thailand, Vietnam, the Philippines, and Indonesia are all among the global top 10 improvers.
Mainland China’s leading cities edge into the ‘Transparent’ tier
Mainland China has also continued to advance, with improved market fundamentals data, an active prop-tech sector, and more coordinated land-use planning contributing to its place among the top global improvers.
Sub-Saharan Africa, MENA, and Latin America struggle to keep pace
Large swathes of the Middle East, Sub-Saharan Africa, and Latin America have seen progress stalled due to political and/or economic headwinds. Several large middle-income markets – like South Africa, Mexico, Brazil, and Turkey – have slipped several places in the global ranking as regulatory enforcement and corporate governance standards have struggled to advance.
Now that we have an idea on which countries are leading the sustainability race, let’s have a look at a few specific policies around the world that can help us a great deal in improved data transparency in the built environment.
The Seattle Energy Benchmarking and Reporting Program (Ordinances 123226 and 123993) requires owners of commercial and multifamily buildings (20,000 square feet or greater) to annually benchmark the energy performance of their building with the EPA’s ENERGY STAR Portfolio Manager. The energy performance data must be reported to the City of Seattle and disclosed to any current or prospective tenant, buyer, or lender upon request.
District of Columbia: The District of Columbia adopted its benchmarking policy in 2008. It was the first U.S. policy to require the public disclosure of benchmarking information. It requires annual benchmarking for commercial and residential buildings greater than 50,000 square feet (approximately 4,600 square meters).
New York, NY: The City of New York adopted its benchmarking policy in 2009. It requires annual benchmarking for residential and commercial buildings greater than 50,000 square feet. Benchmarking information must be reported annually to the City, which posts it on a public website.
San Francisco, CA: The City of San Francisco adopted its benchmarking policy in 2011. It requires annual benchmarking for commercial buildings greater than 10,000 square feet. Benchmarking information must be reported annually to the City, which posts it on a public website.
Boston, MA: The City of Boston adopted its benchmarking policy in 2013. It requires annual benchmarking for residential and commercial buildings greater than 35,000 square feet (approximately 3,250 square meters). Benchmarking information must be reported annually to the City, which posts it on a public website.
Other cities, states, and counties: Benchmarking policies have also been adopted by the City of Austin, TX (2008); the state of Washington (2009); the City of Minneapolis, MN (2013); the City of Cambridge, MA (2014); and Montgomery County, MD (2014).
Australia requires benchmarking of commercial office buildings greater than 2,000 square meters and disclosure of the energy rating that results in the event of a sale or lease. Enacted in 2010 and named the Building Energy Efficiency Disclosure Act, the law created the Commercial Building Disclosure (CBD) program which requires the use of the NABERS (National Australian Built Environment Rating System) tool to for covered buildings.
Ireland: Ireland uses an asset rating methodology for EPCs called Building Energy Ratings (BERs) and has issued about 11,000 BERs for non-domestic buildings through 2012. Display Energy Certificates (DECs) are for large public buildings and are based on measured energy use. By the end of 2012, there were 99 DECs.
Germany: Germany uses metered energy information for existing non-residential buildings to create a consumption certificate while building characteristics are used to create an asset rating in a demand certificate.
We can gauge from these data that slowly but steadily more and more countries are becoming aware and adapting data transparency. Most inspiring example being of Asia Pacific which has marked the highest gain globally with South East Asia, India, and Mainland China in lead in real estate transparency.
Let's now have a look at a few factors which is responsible for driving the real estate transparency movement:
The steady improvement in sustainability transparency
The most significant progress since 2018 has been made in the Sustainability components of the survey, where an increased focus on corporate social responsibility and acknowledgement of the need to create a sustainable built environment bring ESG considerations into the mainstream. Green building certification systems and energy efficiency standards are widespread in higher-performing countries.
Transparency through technology
Countries like the U.S., the Netherlands, and Canada, which already boast high levels of real estate transparency, have embraced Proptech. But markets such as China, Dubai, Mexico, and Brazil – where data coverage by traditional operators may be less extensive – innovations like blockchain and brokerage apps will significantly boost transparency.
Focus on zero carbon buildings
There is a rising expectation that the real estate industry will deliver zero carbon buildings and, in response, the GRETI Survey now covers initiatives relating to net-zero carbon building frameworks. Leading the charge are a number of Green Building Councils, such as UKGBC in the UK and GBCA in Australia, that have developed national frameworks for net-zero carbon buildings.
Building resilience rises up the agenda
In response to these growing risks, the real estate industry is starting to develop its approach to resilience, and the Transparency Survey has put a stake in the ground by including building resilience codes in this year’s edition, with industry groups in Australia and the U.S. taking the lead in creating resilience frameworks.
Health and wellness take center stage
The COVID-19 pandemic has brought the health agenda to the fore, and health and wellness building certification has been included in the Transparency Survey for the first time, although adoption is not currently widespread. WELL Building Standard and Fitwel, both originating from the U.S., remain the foremost certification systems internationally. Nationally-developed systems are beginning to emerge such as Australia’s NABERS Indoor Environment and Singapore’s BCA-HPB Green Mark for Healthier Workplaces. India is also taking steps with its IGBC Health and Well-being Rating.
The world is seeing larger adoption of data transparency in their built environment, even if their approach is different, suitable for their economy and other factors. So now the question remains, how do we deal with all this data that is increasingly being made available?
At Qi Square, we use data from buildings to conduct Virtual Audits to enable remote, low-cost, transparent, and yet accurate assessment of building performance. We will be soon launching our BtrLyf Digital Ecosystem platform with much more data in this space featuring 10,000+ buildings, 100,000+ sustainability champions, and 1,000+ technologies. This is just the start and we can all do our part to increase data transparency in the built environment for better buildings, better communities, and BtrLyf.