India's tier-1 real estate market becomes transparent for the first time

The market emerged to be the top global improver

India’s tier-1 real estate market is now in the ‘transparent’ category for the first time, according to JLL’s Global Real Estate Transparency Index (GRETI) 2024. The market also emerged as the top global improver, driven by advancements in transaction processes and market fundamentals.

The Indian market is ranked 31 in the index, which features 89 countries and has four categories: highly transparent, transparent, semi-transparent, low transparency, and opaque. In the sub-index for governance of listed vehicles, India’s rank stood at 36.

Samantak Das, chief economist and research head, REIS, India, JLL, emphasised the need to expand the REITs market. “Small and medium REITs are the talk of the day. The expansion will enhance India’s ranking,” he added.

Karan Singh Sodi, senior managing director, Mumbai Metropolitan Region and Gujarat, and head - alternatives, India, JLL, stated, “This achievement is poised to attract capital inflows and boost India's standing among global investors. Markets with high transparency ratings garner 80 per cent of global capital flows.”

According to the research, in sub-indices pertaining to performance measurement, regulatory and legal, and sustainability, India’s rank is 40, 43, and 29, respectively.

The research does not feature data for India’s tier-2 and tier-3 markets. “The tier-2 and tier-3 Indian real estate markets see attraction, not for office spaces but for warehouses and logistics, as they are more consumer-driven,” Sodi told Business Standard.

Indian real estate sector reports PE investments of $4.8 billion in H1 CY2024

As per data provided by Das, the Indian real estate sector reported private equity (PE) investments of $4.8 billion in the first six months of 2024. Das estimated the PE investments to grow further to $6 to $8 billion by the end of this year. “However, globally, it is less than 2 per cent. To improve, we have to increase the proportion of institutional participation,” he added.

The investments are primarily directed towards office spaces (54 to 56 per cent), unlike earlier when the investments were more focused on the residential real estate sector.