India's Real Estate Leaps to Transparent Tier, Attracting Global Investment

India’s real estate sector has reached a major milestone, earning a position in the transparent tier of the Global Real Estate Transparency Index (GRETI) for the first time. This achievement underscores the sector's growth and evolution, positioning India as an attractive destination for global investments. The GRETI, published by JLL, evaluates real estate markets across parameters like legal frameworks, enforcement mechanisms, and data accessibility, offering a benchmark for transparency in the industry.

A Leap Forward in Global Rankings

India's ranking climbed from 36th under the semi-transparent tier in 2022 to 31st in 2024, scoring a composite 2.44. This progress places India ahead of countries like Thailand, Malaysia, and Saudi Arabia. The United Kingdom and France retained the top two spots under the high-transparency tier, with scores of 1.24 and 1.26, respectively.

Tier 1 markets such as Delhi, Mumbai, and Bangalore were instrumental in this leap. Factors driving this growth include the institutionalization of the commercial real estate market, better data accessibility, financial regulations, climate risk disclosures, digitized land records, and streamlined building codes.

A Magnet for Global Capital

The improvement in transparency is expected to attract significant capital inflows, as markets with high transparency ratings account for 80% of global real estate investments. "India’s rise in the GRETI reflects collaborative industry efforts and strong governmental support. This achievement will further bolster investor confidence in India," said Karan Singh Sodi, Senior Managing Director at JLL India.

In 2024, India’s real estate market saw remarkable growth, with Tier 1 cities achieving top rankings in transaction processes and market fundamentals. Institutional participation and a commitment to best practices have led to the adoption of market-based valuation systems and the flourishing of REITs (Real Estate Investment Trusts), which have significantly contributed to stabilizing the commercial property sector.

Driving Factors Behind India’s Rise

The Real Estate Regulatory Authority (RERA) and the Insolvency and Bankruptcy Code have provided robust investor protection, while digitized land records and monitoring by the RBI and SEBI have strengthened regulatory frameworks. The push toward sustainability goals, including climate risk disclosure and green building standards, has also enhanced India’s credibility.

Samantak Das, Chief Economist at JLL India, emphasized, "Transparency efforts, combined with institutional participation, have set the foundation for sustained growth in India’s commercial real estate sector. The ongoing adoption of industry-leading practices is a game changer."

The Road Ahead

While the progress is significant, there’s room for improvement. The GRETI report highlights areas for growth, such as developing comprehensive investment performance indices, expanding alternative sector data, improving real estate financing transparency, and intensifying ESG (Environmental, Social, and Governance) initiatives.

Adopting green leases, implementing resilient building standards, and providing biodiversity reporting will also play key roles in further enhancing India’s ranking. These steps could propel India toward achieving the next level of transparency in the real estate market.

Conclusion

India’s journey to the transparent tier marks a new chapter for its real estate sector, highlighting its growing global prominence. With a strong regulatory framework, improved transparency, and a commitment to sustainability, India is poised to become a major player in the global real estate market.