India’s tier-I property market enters JLL’s ‘transparent’ zone

A more proactive financial regulator, new climate risk disclosure guidelines, streamlined building regulations and digitized land records have helped India become a “transparent” real estate market, property consultant JLL said.

India is the “top global improver” in JLL’s Global Real Estate Transparency Index (GRETI) 2024, “making significant strides in transaction processes and market fundamentals,” it said.

JLL’s index showed India’s tier-I real estate market has entered the ‘transparent’ zone for the first time with a composite score of 2.44. India ranks 31st in the list of 89 countries.

India ranks among the top 10 global destinations for transaction process and 12th for market fundamentals. The country’s improvement is fueled by institutional participation, improved access to asset-level information, and reduced information asymmetry, JLL said in the report.

The country’s transparency has also improved in sustainability and performance measurement, but further implementation is required, JLL added.

Regulatory and legal landscape improvements have been significant, but efficient dispute resolution mechanisms need further enhancement. The performance and growth of the real estate investment trust (Reit) market have significantly contributed to transparency, with more progress expected in the future.

Sustainability is a priority, with more green-certified office stock and climate risk disclosures becoming part of the energy conservation building code, it added

“Increasing institutional participation, along with a push for transparency, has led to the adoption of best industry practices in India’s commercial real estate market,” said Samantak Das, chief economist and head of research and real estate information services at JLL India.

“Notably, four existing REITs have driven growth in stabilized commercial assets, while standardized market valuation processes and REIT regulations have fostered market-based approaches. Regulatory enhancements such as RERA and the Insolvency and Bankruptcy Code have improved investor protection, while digital land registry records and strict monitoring by RBI and SEBI have created a robust regulatory landscape,” Das said.

“India’s focus on sustainable real estate has seen a surge in WELL certification, reaching 70 million sq. ft in 2023, a 40% increase from 2021, further highlighting the commitment to climate risk mitigation,” Das added.

The WELL Building Standard is a global certification focused on enhancing human health and wellness through better building environments.

“India’s ascent to the transparent tier in JLL’s GRETI underscores the industry’s cohesive efforts and governmental backing. This achievement is poised to attract capital inflows and boost India’s standing among global investors,” Karan Singh Sodi, senior managing director for Mumbai and Gujarat, and head of alternatives at JLL India, said.

“Markets with high transparency ratings garner 80% of global capital flows. However, JLL identifies room for improvement, particularly in establishing efficient dispute resolution mechanisms,” Sodi said.

“Despite a robust regulatory evolution, the report suggests that enhancing transparency further requires collective action to democratize data access, bolster institutional participation in public markets, and commit to sustainability goals. These measures are critical as India anticipates near-record capital inflows into real estate, with $4.8 billion recorded in H1 2024,” he added.

JLL and LaSalle’s GRETI, which is published every two years, is a unique benchmark of market transparency for property investors, developers and corporate occupiers.

The index evaluates the legal and regulatory environment, enforcement mechanisms and data availability and provides a global comparison of operating conditions across geographies.

This year’s 13th edition includes 256 individual indicators to assess market transparency across 89 countries and territories and 151 cities globally.