Key Factors Driving India’s Leap

India’s ascent in the GRETI rankings is attributed to several key developments in the real estate sector. The country’s financial regulatory environment has strengthened, with the introduction of new climate risk disclosure guidelines that align with global standards. The implementation of streamlined building regulations and the digitization of land records have further contributed to this progress.

Institutional participation has played a pivotal role, with increased access to diverse real estate datasets and improved transparency in market fundamentals. The rise of Real Estate Investment Trusts (REITs) has enhanced market stability and provided standardized valuation processes. Regulatory improvements, including the Real Estate (Regulation and Development) Act (RERA) and the Insolvency and Bankruptcy Code, have bolstered investor protection.

Notable Improvements and Remaining Challenges

India’s performance in GRETI 2024 showcases its improved transparency in sustainability and performance measurement. The country’s transparency in transaction processes and market fundamentals has significantly enhanced, placing India among the top 10 globally. However, further efforts are needed to establish efficient dispute resolution mechanisms and democratize data access.

Samantak Das, Chief Economist and Head – Research & REIS, India, JLL, commented, “The push for transparency and increasing institutional participation have led to the adoption of best industry practices in India’s commercial real estate market. Notably, the growth of REITs and standardized market valuation processes have fostered a more transparent environment.”

Karan Singh Sodi, Senior Managing Director – Mumbai MMR & Gujarat, and Head – Alternatives, India, JLL, added, “India’s entry into the Transparent tier underscores the cohesive efforts of the industry and government. This achievement is expected to attract significant capital inflows and boost India’s standing among global investors. The high transparency ratings of markets are known to capture 80% of global capital flows.”

Future Outlook

India’s progress in real estate transparency is set against a backdrop of increasing global capital flows, with USD 4.8 billion recorded in H1 2024. As the country continues to enhance its regulatory and legal landscape, further improvements in transparency are anticipated. Focus areas for future growth include the adoption of detailed investment performance indices, enriched data coverage for alternative sectors, and a stronger commitment to sustainability and ESG (Environmental, Social, and Governance) goals.

In conclusion, India’s achievement in the GRETI 2024 underscores its growing prominence in the global real estate market. Continued efforts to advance transparency and regulatory practices will be crucial for maintaining and enhancing this position in the future.

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Global Real Estate Transparency Index (GRETI)

JLL and LaSalle’s GRETI, published every two years, is a benchmark for market transparency for property investors, developers, and corporate occupiers. The 2024 edition evaluates the legal and regulatory environment, enforcement mechanisms, and data availability across 89 countries and 151 cities, providing a comprehensive global comparison of operating conditions.

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The latest GRETI report highlights India as the top global improver for 2024, showcasing notable progress in transaction processes and market fundamentals. India’s enhanced transparency extends to sustainability and performance measurement, although further improvements are still needed.

Samantak Das, Chief Economist and Head of Research & REIS at JLL India, emphasized, “India’s rise to the transparent tier reflects increased institutional participation and the adoption of best practices in the commercial real estate market. The growth of Real Estate Investment Trusts (REITs) and standardized valuation processes have fostered market efficiency. With office REITs representing 12% of Grade A office stock, there is substantial potential for expansion. Regulatory advancements such as the Real Estate (Regulation and Development) Act (RERA) and the Insolvency and Bankruptcy Code have bolstered investor protection. Furthermore, digital land registry and stringent oversight by RBI and SEBI have established a strong regulatory environment. India’s commitment to sustainability is evident, with WELL certification for 70 million sq. ft of real estate in 2023, marking a 40% increase from 2021.”

Karan Singh Sodi, Senior Managing Director at JLL Mumbai and Gujarat, and Head of Alternatives in India, noted, “India’s achievement in GRETI underscores the collective efforts of the industry and government, positioning the country to attract increased capital inflows and elevate its global standing. Markets with high transparency attract 80% of global capital flows. However, the report indicates that further improvements are needed, especially in dispute resolution mechanisms. To advance further, India must focus on democratizing data access, enhancing institutional participation in public markets, and deepening its commitment to sustainability. This is crucial as India anticipates near-record capital inflows into real estate, with USD 4.8 billion recorded in the first half of 2024.”

India’s progress in transparency is marked by its significant leap from previous rankings. The country now ranks among the top ten globally for transaction processes and 12th for market fundamentals. Key factors driving this advancement include increased institutional participation, better access to asset-level information, and reduced information asymmetry. While regulatory and legal improvements have been substantial, the need for more efficient dispute resolution mechanisms remains.

The report also notes that India’s performance in transparency improvement is unparalleled in the Asia-Pacific region and globally. The expansion of the REIT market, coupled with regulatory enhancements and green initiatives, has played a crucial role in this advancement.

To move to the next tier of transparency, India must adopt more detailed investment performance indices, enhance data coverage for alternative sectors, improve public beneficial ownership records, and intensify its commitment to environmental, social, and governance (ESG) criteria. This includes reporting on nature-related risks, resilient building standards, biodiversity, and green leases. As the real estate cycle evolves in 2024, countries with deep market understanding and transparency are expected to lead in real estate liquidity and recovery.

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