Indian real estate moves closer to being fully transparent: JLL Survey

Mumbai: India has moved up one place to take up 35th spot on JLL’s Global Real Estate Transparency Index (GRETI) 2018. INDIA has also shown incredible improvement in the latest survey and has emerged as one of the Top Ten countries to registered maximum improvement in transparency in real estate over last two years. The country’s performance over last two cycles of JLL’s GRETI indicates that it has moved by five places since 2014.

Compared to similar market sized countries that are also part of the same “semi-transparent” group; India’s marked improvement is unmatched by its peers. Among BRICS Countries both China and South Africa remained on the same rank 33rd and 21st respectively as in 2016 assessment, Brazil slipped to 37th and Russia remained confined to 38th rank.

Ramesh Nair, CEO and Country Head, JLL India said, “India’s remarkable improvement in the transparency scores across all markets has started to benefit the nation in the form of increased volumes of international capital being deployed into the country. Improved market fundamentals, policy reforms and liberalisation of FDI into realty sector and retail and strengthening of information in public domain were main influencers, along with digitisation of property records and assigning “industry status” to affordable housing. Tools like “PropTech” and “BlockChain” are becoming integral part of realty sector and use of technology is only going to add transparency in to the sector.”

Private equity investments into realty sector is one of the best indicators of the confidence of the investor community and the confidence is closely linked with the transparency of the property markets and improvement in transparency. In India’s case, where the transparency index rank moved up by five places in last two editions of JLL-GRETI, rise in private equity over these years clearly reflects the growing confidence and comfort of the world best and large PE Funds. PE Investment in Indian Realty has grown in every year from USD 2.2 billion in 2014 to USD 4.7 billion in 2015, to USD 6.9 billion in 2016 and it was USD 6.3 billion in 2017. This year too, we expect handsome investment activity that will continue to demonstrate the improving transparency of India property markets.

Ramesh Nair, further added, “The country’s rankings is likely to improve further in GRETI 2020 mainly on the back of the comprehensive implementation of the Real Estate (Regulation and Development) Act in all states of India, introduction of insurance policies for Land Title Insurance, pseudo-ownership of properties weeded out through “Benami Transactions Act” and the sector aligning itself well with Goods and Service Tax (GST) regime.”

India’s task is cut out for entering the “Transparent Markets” defined by ranks up to 30 by executing the reforms well and fast by the time of our next assessment in year 2020. The index measures transparency by looking at factors including data availability its authenticity and accuracy; governance- of public agencies as well as stakeholders of the realty sector; transaction processes and costs associated with those; and the regulatory and legal environment.

India is one of top ten countries showing maximum improvement in transparency score. In semi-transparent market that India belongs to and in transparent market that India aspires for, countries of The Netherlands, Thailand, UAE, Serbia have better improvement in scores than India, while Slovakia, and Thailand have same improvement in score like India. India needs to back itself and continue its journey towards creating a transparent, accountable and respectable realty sector that the best talent aspires to make careers in.