Transparency in the Indian real estate market has improved to the extent of making the country get listed among the top 10 improved markets globally. The composite transparency score of India is from 2.82 to 2.73, which is higher than the top 10 transparent markets across the globe like Australia and UK, Canada, Japan and more.
Real estate transparency in India is reinforced by the rising number of real estate investments in the country and real estate investment trusts that are helping to broaden market data and bring professionalism, complementing recent regulatory compliance like RERA platforms, Dharani portals and digitalization of land registration.
"The move towards greater transparency in India will intensify investor interest and bolster occupier confidence. As a result, we will see more capital deployment into the country as it demonstrates consistent efforts to make accurate data available, enforce legal protections for property ownership, and enhance the regulatory environment to facilitate the transactions," said Radha Dhir, CEO and Country Head, India, JLL.
India can facilitate transparent data for robust progress with the regulatory changes like RERA and digitalization of all transaction processes.
“Sustainability continues to be the key focus for the world going ahead. We have seen India take great strides in sustainability in the past years. However, there is a need for a more concerted and congruent thought process and action plan to bring sustainability into the mainstream," Dhir added.
In order to move up from the semi-transparent list, the country needs to make major improvements in sustainability tracking, this is not only a major change in the country over a couple of years; both investors and occupiers are driving the change. There are several initiatives underway both at the national and local level to give a greater push to sustainability in the country. Some of them include National Guidelines on Responsible Business Conduct from 2021, with reporting for the largest 1,000 companies by market cap to be compulsory from 2022-23, compulsory a building energy management system in all upcoming and new buildings, and local plans like Mumbai's Climate Action Plan, released in 2022, aiming to establish a regularized system to conduct regular energy performance benchmarking of buildings by 2025.
Making green certifications with respect to energy conservation building code will also give a good push to sustainability. The regulatory push for mandate tracking and reporting is still lacking in the country but is expected to get a major motivation with the nation's call for net-zero by 2070.
The score of improvement for India was highest with respect to the parameters of transparency in the real estate transaction process. The regulatory initiatives in the country are facilitating a deeper and better data availability; information access has improved a great way. The new reforms in India are pushing better professional standards for agents, weeding out illegal finance with strict anti-money laundering regulations in place. With all these reforms in place, transactions in India have become more transparent and meaningful. India tailed the countries like Vietnam and Malaysia in the improvement of transparency of transactions.
“India's investment performance parameter has held steady with a conducive investment environment in place and healthy opportunities for investors. The last two years have also been marked by upheaval and a reset in investor strategies. Some countries have found increased favour from investors and have moved up the rankings. India has kept its ranking steady, though it has improved its composite score in this parameter," said Samantak Das, Chief Economist and Head of Research, REIS, India JLL.
Interest in the diversification of real estate assets
For many investors in the Asia Pacific region, diversification remains the core theme. Institutional capital controlled by asset managers like sovereign wealth funds and pension funds turns into an active alternative to real estate investments. There are regulations in place to track nearly two-thirds of the markets which means the expectation for transparency in niche property has grown.
India has seen rapid progress in the availability of data frequency across major cities and asset classes through the intervention of tech platforms and regulatory reforms, which needs to be replicated in other parts of the country and alternative sectors with the work in progress. All this needs intervention from both the private sector and government push towards the digitalization of land records. The data access improves market transparency, corporate governance practices and publicly listed REITs creating more publicly available datasets. Sustainability in India needs a greater push to quickly climb to the transparent tier
Future-oriented: As we look forward
Both transparency and sustainability are mingling with each to create game-changing trends in the real estate sector in the country. Regularized and standard sustainability metrics will make it easy to create benchmark assets. Mandating data reporting turns to be a key to environment decarbonization and climate risk mitigation across different countries globally.
Paving a way from regulations to practice with respect to finance, land, taxation, and money laundering will be vital to raise the transparency bar and match high expectations.
