• Skip to content
  • Skip to navigation

Grant Thornton uses cookies to monitor the performance of this website and improve user experience

To find out more about cookies, what they are and how we use them, please see our privacy notice, which also provides information on how to delete cookies from your hard drive.

Global site
  • Global site
Grant Thorton Logo

Grant Thornton Logo Grant Thornton logo

Contact us
  • Insights
  • Services
  • Industries
  • Meet our people
  • About Us
  • Location
  • Careers
  • Webinars
  • Audit and Assurance
  • Financial Reporting Advisory Services
  • Tax
  • Advisory
  • Scrutineering Service
  • Business Process Outsourcing
  • Country Desks
Financial Reporting Advisory Services Home
  • Financial Reporting Solutions
  • IFRS/FRS Advisory
  • Lease Accounting
Tax Home
  • Corporate Tax Compliance
  • Tax Advisory
  • Goods and Services tax (GST)
  • Transfer pricing
  • Employer solutions
  • Private client services
Advisory Home
  • Corporate finance
  • Forensic advisory
  • Restructuring & insolvency
  • Business Risk Advisory
Country Desks Home
  • Japan Desk
  • China Desk
  • Energy & resources
  • Financial services
  • Real estate & construction
  • Technology, media & telecommunications
  • Experienced hires
  • Students and Graduates
  • Working at Grant Thornton
  1. Grant Thornton Singapore
  2. Press releases
  3. 2014
  4. Lack of governance could hamper growth

Lack of governance could hamper growth

12 Mar 2014
  • Lack of governance could hamper growth

Real estate and construction business optimism tempered by weak governance foundations

The majority of businesses in the real estate and construction sector are still not properly insulated against fraud and corruption according to the latest research from the Grant Thornton International Business Report (IBR). This comes despite warnings suggesting that such practices could account for as much as 10% of global sector revenues or around US$1 trillion, rising to US$1.5 trillion by 2025.

Globally, just 41% of sector businesses have measures in place to accommodate potential whistleblowers, although this ranges from 70% in North America to just 23% in Europe, with Asia Pacific (31%) and Latin America (28%) also lagging behind. A majority of businesses globally do have a compliance and ethics programme in place (57%) but again while this is common in North America (76%), it is much less so in many other parts of the world, including Asia Pacific (51%), Europe (45%) and Latin America (43%).

Clare Hartnell, global leader for real estate and construction at Grant Thornton, said: "The lack of focus on governance is understandable, if still a concern. Real estate & construction businesses have been in ‘wait and see’ mode for a long time, focusing on staying afloat rather than expansion. But now that the market is moving in the right direction, businesses need to make sure that the correct controls are in place so that governance issues do not stifle their next phase of growth."

The IBR reveals that net 42% of businesses are optimistic for the sector in 2014, led by southeast Asia (78%), Latin America (60%) and North America (56%). Europe (33%) is somewhat polarised between persistent pessimism in southern Europe but growing optimism across northern and eastern parts of the region.

This optimism is feeding into business growth prospects for the year ahead, with  an increasing proportion expecting to raise revenue (+8pp) and profitability (+5pp) in 2014, compared with this time last year. Businesses in southeast Asia (54%) and North America (50%) are the most bullish in terms of profitability in 2014. Sector leaders in Europe (33%) and Latin America (31%) remain slightly more subdued.

Clare Hartnell added: "Developers, property companies, investors and homeowners suffered disproportionately during the financial crisis, but now, finally, expectations for profitability, jobs and orders are all on the rise. House prices are climbing in key markets such as the UK and the US, contributing to the so-called 'wealth effect' which boosts the consumption patterns of homeowners.

"But these improvements are far from uniform. Instead we find pockets of opportunity; where money seems to be channelled into cities and regions, rather than countries. Even certain areas in economies that suffered badly in the recession, such as Spain and Ireland, are becoming attractive again.

" Increasing activity in the sector is a strong indicator that the global recovery is gaining momentum, although it would not take much to destabilise these improvements. As cities rather than countries seem to be the focus for investors and businesses alike, this can also mean distorted values in a small area, with the risk of some potential future realignment."

Download 'Microclimates of opportunity'

– ends –

John Vita, Director, public relations and external affairs, +1 312 602 8955

Dominic King,  Editor, global research, +44 (0)20 7391 9537

Share this page
  • Facebook LinkedIn
  • Twitter Twitter
  • LinkedIn LinkedIn
  • Grant Thornton on Youtube
  • LinkedIn icon
  • Twitter icon
CONNECTclose
  • Contact us
  • Meet our people
  • Global reach
ABOUTclose
  • About us
  • Location
  • Careers
  • Press releases
LEGALclose
  • Privacy
  • Site map
  • Disclaimer
  • Cookie policy

© 2021 Grant Thornton Singapore Pte Ltd - All rights reserved. “Grant Thornton” refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Singapore Pte Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions.

    • EN
    • Contact us