JLL’s ninth Global Real Estate Transparency Index discloses the list of countries that provide the most commendatory operating environments for investors, builders, and developers. The measuring criteria Index measurement is quite authentic and detailed. It covers 109 markets around the world.
JLL’s Global Real Estate Transparency Index evaluates transparency based on 139 variables relating to factors such as business agreement processes, legal frameworks, corporate governance rules, performance measurement and data opportunity. The criteria for a higher real estate transparency is directly related to the powerful investor and corporate real estate activities.
The facts and findings:
According to JLL and LaSalle Investment Management’s Global Real Estate Transparency Index (GRETI) 2016 report, ‘Two-thirds of real estate markets globally have shown progress in levels of transparency over the past two years’.
If we go by the evaluation of the current momentum and reforms, Tier-1 cities show promise of breaking into GRETI’s ‘transparent’ category by 2018. The important findings of the report are highlighted below:
- Out of 109 countries, the top-10 highly transparent countries alone account for 75% of global investment into commercial real estate.
- The top 10 highly-transparent countries are followed by 20 transparent countries, 37 semi-transparent countries , 21 low transparency countries, and 21 opaque countries.
- India made good improvements in the overall transparency scores across all markets and especially in the tier-1 cities in which it has moved up to the 36 from 40 which is an improvement from the previous rankings
- Tier-2 cities have also made good progression and moved from 42nd in 2014 to the 39th spot in 2016. Amusingly, Indian tier-2 cities rank higher than China’s tier-1.5 and tier-2 cities.
The Indian Angle:
India has shown good improvement, it has moved up by four ranks. One of the primary reason for this growth and improvement goes to the Modi government. Through improved market fundamentals, policy reforms movements like Land Acquisition Act, FDI investment into the realty sector, and the digitisation of land records and opening up of real estate investment trusts, the government have contributed a lot.
India relatively has a low score in the transaction process and weak professional standards for local agents, which is estimated to improve during the next assessment period of JLL’s next Transparency Index release on the grounds of the actualisation of the Real Estate Act. Some important developments such as compensation to landowners and the protection of home buyers have been instrumental in improving transparency levels. The implementation of the regulatory bill which will help in regulating the agents will further improve clarity in India.
What the future upholds:
According to ibef.org reports, the real estate sector is one of the most globally recognised sectors. In India, real estate is the second largest employer after agriculture and is slated to grow by 30 percent over the next decade.The Indian real estate market has become one of the most preferred destinations in the Asia Pacific# as overseas funds accounted for more than 50 percent of all investment activity in India in 2014, compared with just 26 percent in 2013.
Other than reformatory rules and regulations, social media too will supposedly play a pivotal role in the removal of corruption that will further encourage the pace of change, especially amongst the ‘Semi-Transparent’ countries.
For a detailed knowledge check out this video:
Curated by editor at Wienerberger India
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