India’s Transparent Real Estate Market Poised to Attract Major Investments
India’s real estate market is transforming towards greater transparency, creating increased capital inflows and a stronger global standing. According to the recent Global Real Estate Transparency Index (GRETI), India’s Tier 1 markets have reached a new crest, highlighting this transformation. India has moved into the transparent category for the first time, ranking 31 with a composite score of 2.44 in GRETI 2024’s list.
This transformation is a result of enhanced institutional participation, improved regulatory frameworks and better access to comprehensive data on real estate. Every two years, the Global Real Estate Transparency Index is released to gauge the visibility of market relationships ranging from legal/regulatory conditions to performance measurement through enforcement mechanisms and data availability. According to the index, markets with higher transparency ratings capture 80% of global capital. In comparison, the United Kingdom and France scored 1.24 and 1.26 respectively, leading the higher transparency tier, while Singapore recently joined the Highly Transparent group.
India has also been classified in the semi-transparent tier; it leapt from 36th place in 2022 to its current position, showing improvement. Achievements like these are the result of new climate risk disclosure guidelines, proactive financial regulations combined with streamlined building regulations and digitized land records. India remains the only Asian country to feature in the top 10 for the ‘Transaction Process’ parameter, thanks to improvements in single ownership assets in office leasing, organized transaction processes, and regulatory reforms such as RERA.
The GRETI 2024 report, now in its 13th edition, evaluates 256 individual indicators across 89 countries and 151 cities. India’s ranking among the top 10 for transaction processes and 12th for market fundamentals is a testament to the country’s ongoing efforts to enhance market transparency. This movement has been supported by an uptrend in institutional participation, expansion of the Real Estate Investment Trusts (REIT) market, regulatory upgrades and digital land registry rollouts. Although regulatory and legal landscape improvements were impressive, the report says much more can be done in terms of dispute resolution mechanisms.
There’s an opportunity for the listed vehicle market to grow, as office REITs in India account for 12% of Grade A office stock. A strong regulatory environment has been produced by stringent oversight 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. The market now includes green-certified office stock and climate risk reports showing a focus on helping the environment. WELL certifications reached 70 million sq. ft. in 2023 up 40% from 2021.
A senior industry expert commented, “The rise of India to the transparent tier in the Global Real Estate Transparency Index shows the government’s support and the industry’s concerted efforts. This accomplishment is expected to increase capital inflows and elevate India’s profile among international investors. 80% of capital flows worldwide are directed towards markets with high transparency ratings.”
Even with these steps forward, there are some areas that need to be improved further. Setting up faster ways to settle disputes remains a big task. To make things clearer, we still need to work on giving more people access to data, getting more big players into public markets, and sticking to sustainability goals. With a huge $4.8 billion expected to flow into real estate in the first half of 2024, India looks set to become a top spot for global investors.
