India’s Real Estate Market Reaches New Transparency Milestone in 2024

In JLL’s Global Real Estate Transparency Index 2024, India has advanced remarkably, becoming transparent for the first time. The commercial market’s establishment and easier access to a wider range of real estate datasets are the reason for this development. In terms of increasing transparency, India is in the lead globally thanks to increased data coverage and better data quality in a variety of real estate sectors.

“Rising regulation cooperation along with an exertion for clarity has driven to the foundation of best industry hones in India’s commercial genuine domain showcase,” agreeing to Samantak Das, chief financial analyst and JLL’s India head of research and REIS. Particularly, the rise of fixed commercial assets has been supported by four current REITs, and market-based techniques have been promoted by regulated market assessment procedures and REIT rules. The Grade A office stock in India is made up of 12% office REITs, so there is significant potential for growth in the listed vehicle market. A strong regulatory environment has been produced by strict supervision by the RBI and SEBI, digital land registry records, and regulatory improvements like RERA and the Insolvency and Bankruptcy Code that have enhanced investor protection. Further highlighting the nation’s dedication to reducing climate risk is the jump in WELL certification in India’s sustainable real estate sector, which reached 70 million square feet in 2023—a 40% increase from 2021.

The rise of India to the transparent tier in JLL’s Global Real Estate Transparency Index, according to Karan Singh Sodi, senior MD, Mumbai MMR & Gujarat, and head, alternatives, India, highlighted the sector’s coordinated efforts and support from the government. This accomplishment is expected to increase capital inflows and elevate India’s profile among international investors. Eighty percent of global capital flows go to markets rated highly transparent.

JLL notes that there is still space for development, especially in the area of creating effective dispute resolution procedures. In spite of a strong regulatory development, the research makes the case that more cooperation is needed to advance institutional engagement in public markets, democratise data access, and uphold sustainability objectives in order to further improve transparency. With $4.8 billion recorded in H1 2024, India is expected to see near-record capital inflows into the real estate sector, making these measures crucial.

Notable is India’s progress towards transparency: For the first time, institutionalisation, enhanced data accessibility, proactive financial regulation, norms for disclosing climate risk, streamlined building rules, and digitisation of land records have propelled Tier 1 markets in India into the Transparent tier. India ranks 12th in the world for market fundamentals and is in the top ten for transaction processes worldwide.

Transparency has greatly benefited from the performance and expansion of the REIT sector, and further advancements are anticipated in the near future. Sustainability is a top concern, as seen by the increase in green-certified office space and the addition of climate risk disclosures to ECBC.

India is the country that sets the bar for transparency improvement globally. In the 2022 rankings, it was the most improved in Asia and was among the top 10 global improvers.
This time, India has risen to the top spot globally in terms of progress between two GRETI surveys thanks to the ongoing effects of various laws and market evolution. Contributing factors include increased institutional engagement, the adoption of best practices in the business, the expansion of the REIT market, improved regulations, the introduction of the digital land register, and green efforts.

India’s road to the next tier of becoming a highly transparent market on GRETI involves focused efforts: The adoption of more detailed investment performance indices, enriched data coverage for alternative For India to advance in the Transparency ratings to the next level, it will be necessary to provide extensive information on real estate financing, make public beneficial ownership records accessible, and increase its commitment to ESG, which includes reporting risks related to the environment, resilient building standards, biodiversity, and the use of green leases. Countries with a strong understanding of the industry, transparency, wide capital markets, and capacity for diversification will spearhead the recovery in real estate liquidity when a new real estate cycle begins in 2024.
India ranks 40, 43, and 29 in sub-indices related to sustainability, regulatory and legal matters, and performance assessment, respectively, according to the report.

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