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HONG KONG-Better information flows are making Asia’s property markets less risky, but funds looking to invest in China and India should still be wary of questionable titles and accounting, according to consultants Jones Lang LaSalle.

The global transparency index found that China was still classed as “low” but its score has improved to 3.50 points against 3.71 two years ago. India is a notch above, in the “semi-transparent” third category of five, with its score moving to 3.46 from 3.90 the last time the index was published.

The top Asian scores were notched up by Hong Kong with 1.30 and Singapore with 1.44, while Australia and the US occupy joint top place globally with a score of 1.15. Describing a “virtuous cycle”, Guy Hollis, director at Jones Lang LaSalle’s international capital group, says increasing foreign investment in Asia had improved information flows, which would in turn give investors more confidence. “Funds are much more aggressive and have certainly invested a lot of money, and in most places they haven’t compromised on standards,” Hollis says.

Cross-border investment in the Asia-Pacific region jumped 56% last year to $20 billion, but this year would see even greater capital flows, Hollis says, pointing to some $9 billion pledged for China just in the first three months of 2006.

Hollis says the biggest complaints among foreign investors in Asia were over property titles, especially in China and India. India, which eased rules on foreign investment in construction early last year, lacks a centralized title registry. And with property prices soaring, there has been an increase in the number of land disputes.

In China, land use rights cannot be directly traded, so investors must take the risk of acquiring the company that holds them. But this possibility is hampered by relatively low accountancy standards. “It varies in China, but the more you go west and north, the worse it gets,” Hollis says.

Despite these problems, investors are rushing to get stakes in economies growing at over 8% a year and this is pushing up prices and depressing property yields in China and India.

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