According to JLL’s 2022 Global Real Estate Transparency Index (GRETI), India’s real estate market transparency ranks among the top-10 best markets globally. India’s improvement in transparency score from 2.82 to 2.73 between 2020 and 2022 is higher than that of some highly transparent markets such as Canada, Belgium and Spain.
JLL said in a statement that the improvement in India has been due to digitization and data availability for transaction processes apart from overall market fundamentals.
It added, “India’s improvement in transparency is driven by increased institutional investment and the growing number of real estate investment trusts (REITs) to broaden market data and complement regulatory initiatives such as the Model Tenancy Act, and digitization to provide more in the sector.” Helps to bring professionalism in land registries and market data, such as through Dharani and Maha RERA platforms.”
Radha Dhir, CEO and Country Head (India) at JLL said that the move towards greater transparency in India will boost investor interest and increase the confidence of occupiers, and, consequently, will lead to more capital deployment in the country as it makes precise Demonstrates consistent efforts for Available data, enforcing legal protection for asset ownership, and enhancing the regulatory environment to facilitate transactions.
“Regulatory changes in Indian real estate sectors like RERA and digitization across all transaction processes have led to more clean and transparent data availability to help the country make tremendous strides in the index,” said Dhir.
He also said that stability remains the main focus of the world moving forward and India has made great strides in sustainability over the years. However, mainstreaming sustainability requires a more concrete and tailored thought process and action plan.
Sustainability requires continuous thinking
JLL said to be able to move from the current semi-transparent list to the coveted transparent list, the country needs to improve sustainability tracking. Sustainability hasn’t been one of the key areas of change for India over the years, but investors and occupiers are driving the change.
“A number of initiatives are underway at the national or local level, including the National Guidelines on Responsible Business Conduct from 2021, reporting for the largest 1,000 companies by market cap by 2022-23, and local plans such as the Climate Action Plan of Mumbai, 2022. which is expected to establish a system for performing regular energy performance benchmarking of buildings by 2025, and mandate a building energy management system in all new buildings,” it added.
Creating green certification/rating and making ECBC compliance a mandate will further promote sustainability. Regulatory incentives for mandatory tracking and reporting are still lacking, but should get a major push following India’s call for Net Zero by 2070. According to JLL’s 2022 Index, sustainability has been the biggest driver of improving transparency in markets.
With an increasing number of countries and cities establishing mandatory energy efficiency and emissions standards for buildings, and the adoption of green and healthy building certifications more widely. However, sustainability measures are the least transparent globally, and the fragmented regulatory landscape – with varying standards at the municipal, state, region and country levels, and a wide range of sustainability credentials, benchmarks and standards – is making it . It is becoming increasingly difficult for investors and companies to navigate and understand their responsibilities.
Transaction process improvement
This was the parameter on which India’s score improvement was highest in GRETI 2022. Access to asset information has improved substantially, given regulatory initiatives and better and in-depth data availability. With the reforms creating an environment for property agents to weed out illicit finances through better professional standards and stringent anti-money laundering regulations, the transaction process in India has become more transparent and meaningful.
India’s improvement in this parameter was just behind Vietnam and Malaysia among other APAC countries.
Samantak Das, Chief Economist and Head (Research), REIS, India, JLL, said: “India’s investment performance parameter has been stable with favorable investment climate in place and healthy opportunities for investors. The past two years have also been marked by turmoil and a reset in investor strategies. Some countries have received increased investor support and have moved up the rankings. India has kept its ranking stable though it has improved its overall score in this parameter.
JLL’s GRETI is an index that provides an understanding of the transparency spectrum across real estate parameters, most useful to real estate investors globally. It provides an opportunity for countries to identify backward indicators and make a concerted effort to improve global investment flows.
Interest in alternative real estate properties
Diversification remains a main concern for many investors in the Asia-Pacific. Institutional capital, such as those controlled by asset managers, pension funds and sovereign wealth funds, is active in alternative real estate sectors in about two-thirds of the markets tracked. This means increased expectations of transparency in specific asset types such as lab space, data centers, or student housing.
India has made rapid strides in the availability of high frequency data in its major cities and major asset classes through the intervention of technology platforms and regulatory reforms. This needs to be replicated for other cities and alternative areas, with private sector participation and digitization of land and property records by the government already underway. As market transparency improves through access to data, better corporate governance practices, and more publicly listed REITs that create more publicly available datasets, India is expected to climb to an increasingly transparent level of sustainability. The agenda needs to be pushed further.
looking ahead
JLL said transparency and sustainability are now colliding to create new, practical and game-changing trends for the real estate industry. Standardized stability measurement metrics will make it easier to benchmark assets globally.
“Mandatory such data reporting will be critical to built environment decarbonization and climate risk mitigation across countries. The growing proliferation of technology is pushing towards tracking and collecting granular and high-frequency data. While this This is also true in countries with digital data sources and governance, advanced infrastructure and deep capital markets, as opposed to improved transparency by the proliferation of data aggregators that build market data from scattered sources. ,” it added.
JLL said regulations in financial regulations, land use planning, taxation, anti-money laundering and reputed domains would be the road necessary to put them into practice.
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