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HomeNationalIndia's real estate market transparency among the most-improved globally: JLL MPNRC News
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India’s real estate market transparency among the most-improved globally: JLL MPNRC News

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According to JLL’s 2022 Global Real Estate Transparency Index (GRETI), the transparency of the Indian real estate market is among the top-10 most improved markets globally. India’s improvement in transparency scores between 2020 and 2022 ranges from 2.82 to 2.73, which is higher than some highly transparent markets such as Canada, Belgium and Spain.

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The improvement in India is due to the availability of data along with the overall market fundamentals for digitization and transaction processing, JLL said in a statement.

“Improvements in transparency in India are reinforced by institutional investment and the growing number of real estate investment trusts (REITs) that help expand market data and complement regulatory initiatives such as the Model Tenancy Act and digitization to bring more professionalism to the sector.” Land registration and market data through holding and Maharashtra platform.

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Radha Dheer, CEO and Head of Country (India) at JLL, said that moving towards greater transparency in India would increase the interest of investors and boost the confidence of traders and as a result, the country would see more capital deployment as it demonstrates consistent efforts to make it accurate. Available data, enforcing legal protections for property ownership and enhancing the regulatory environment to facilitate transactions.

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“Regulatory changes in the Indian real estate sector like Rera and digitization of all transaction processes have made the availability of more clean and transparent data in the country a huge step forward in the index,” Dheer added.

“Sustainability is the main focus for the world to come, and India has made great strides in sustainability over the last few years,” she said. However, bringing sustainability into the mainstream requires a more integrated and coherent thought process and action plan.
Eternity requires eternal thought

JLL has said that in order to move from the current semi-transparent list to the prestigious transparent list, the country needs to improve its sustainability tracking. For India, sustainability has not been a major area of ​​change in the last few years, but it has been brought about by investors and traders.

“A number of initiatives are underway, including national guidelines on responsible business conduct at the national or local level from 2021, reporting for the largest 1,000 companies in terms of market cap from 2022-23 and local schemes such as Mumbai Climate Action Plan. , Released in 2022, which will establish a system for conducting regular energy efficiency benchmarking of buildings by 2025 and make building energy management systems mandatory in all new buildings, ”it added.

Creating green certificates / ratings and adhering to ECBC will further promote sustainability. Regulatory motivation for mandatory tracking and reporting is still low but it should get a big push by 2070 after India’s call for Net Zero. Sustainability is the biggest driver for improving transparency in all markets, according to JLL’s 2022 index.

An increasing number of countries and cities are setting mandatory energy efficiency and emission standards for buildings and are adopting more comprehensive green and healthy building certifications. However, sustainability measures are the least transparent globally and the fragmented regulatory landscape – in which different standards are being set at the municipal, state, region and country levels, and the growing range of sustainability credentials, benchmarks and standards – is making it. Investors and companies are finding it difficult to understand and navigate their responsibilities.
Improving transaction processes

This is the criterion for improving India’s score in GRETI 2022. Given the availability of regulatory initiatives and better and more in-depth data, access to asset information has greatly improved. As the reforms create better business standards for property agents and stricter anti-money laundering regulations, creating an environment for illicit financing, the transaction process in India has become more transparent and meaningful.

India’s improvement in this parameter lags behind Vietnam and Malaysia, other APAC countries.

Samantak Das, Chief Economist and Head (Research), at REIS, India, JLL, said: “Investment performance in India has remained stable with the right investment climate and healthy opportunities for investors. The last two years have been turbulent and restored to investor policies. Some countries have received more favorites from investors and have increased their rankings. India has maintained its ranking, but has improved its composite score in this parameter. ”

JLL’s GRETI is an index that gives an insight into the transparency spectrum in real estate parameters, which is most useful for real estate investors globally. This gives countries an opportunity to work together to identify indicators of backwardness and to improve global investment flows.
Interest in alternative real estate assets

Diversification is a key theme for many investors in Asia-Pacific. Institutional capital, such as asset managers, controlled by pension funds and sovereign wealth funds, is active in the alternative real estate sector in nearly two-thirds of the tracked markets. This means increased expectation of transparency in specific asset types such as lab space, data centers or student accommodation.

Through the intervention of tech platforms and regulatory reforms, India has made rapid progress in the availability of high-frequency data in its major cities and key asset classes. A combination of both private sector participation and government pressure on the digitization of land and property records must be replicated for other cities and alternative sectors, including work already underway. As access to data, better corporate governance practices and more publicly available datasets improve market transparency through more publicly listed REITs, India needs to further enhance its sustainability agenda to move faster to a more transparent level.
Looking forward

Transparency and sustainability are now at odds with each other to create new, insightful and game-changing trends for the real estate industry, JLL said. The standardized stability measurement metrics will make it easier to benchmark assets globally.

“Making such data reporting mandatory would be important to reduce built-in environmental decarbonization and climate risk in all countries. The increasing proliferation of technology is creating a push towards granular and high-frequency data tracking and aggregation. While this works best in countries with digital data sources and administration, advanced infrastructure and deep capital markets, the proliferation of such data aggregators that generate market data from scattered sources also improves transparency, ”he added.

JLL said that in order to increase the level of transparency and meet the rising expectations, it would be necessary to go from financial regulation, land use planning, taxation, anti-money laundering and reputed domain – to the way it is implemented.

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