For the first time ever, India’s real estate market has been categorized as ‘transparent’ by the Global Real Estate Transparency Index, compiled by property advisory JLL every two years. Mint explains the index and India’s position.
Launched in 1999, and conducted every two years, it categorizes real estate markets into five tiers—highly transparent, transparent, semi-transparent, low transparency and opaque. Factors include regulatory and legal environment, transaction processes, sustainability, data availability and performance quality. Each country’s property market is then given a score. In the 2024 edition, sustainability transparency, including construction standards and energy performance, were given extra focus. The index offers a guide for real estate investors, lenders as well as corporate consumers.
Better than two years ago. ‘India-Tier 1’ has climbed to the 31st position among the 89 countries ranked, from the 36th in 2022. This means that tier 1 cities—Delhi-NCR, Mumbai and Bengaluru—have moved up from being semi-transparent in 2022 to transparent now. India is a top global improver, led by greater data coverage and improved quality across both core and niche asset classes such as data centres and industrial parks. A proactive financial regulator, new climate risk disclosure guidelines, streamlined building regulations and digitized land records have contributed towards transparency.
India has broken into the top 10 countries on transaction process, driven by rising institutional investor participation and greater access to information on properties. The four real estate investment trusts (REITs) have led to standardised market valuation practices and better disclosures. The Real Estate (Regulation and Development) Act also helped.
India has been considered an unorganized and semi-transparent property market for years. Greater transparency will improve investor interest and bolster occupier and buyer confidence. Accurate data availability and enforcement of legal protection for property ownership can lead to more capital deployment. Property markets with high transparency ratings garner around 80% of global investments. As India’s market processes mature in line with global standards, more global investors may make larger bets.
India has a long way to go. Its office stock is 56% green-certified but a greater push is needed for implementation of climate related disclosures and net-zero commitments, as per JLL. India also needs a reliable property index that can be used as a performance benchmark. The use of tech in transactions needs improvement while the availability of land records with consistent information and faster dispute resolution are desired, too. More geographic information system mapping could be used.
