The outlook on Indian real estate has been showing a positive trend from the global investors’ perspective owing to changes in regulatory reforms. “ The policy initiatives, including the much awaited RERA-Real Estate Regulatory Act is making real estate more attractive for large institutional investors,” as per Christian Ulbrich, CEO-JLL.
As per an analysis of recent investment trends, India is moving in the right direction and is inspiring confidence in global investors. Due to the extremely constructive changes in its regulatory framework, India has become an investment hotspot to foreign investors. The Indian economy is also seeing a positive upward graph. There have been some important developments which will impact Indian real estate favorably – Increased rate of consolidation, improved transparency and the fact that REITs [Real Estate Investment Trusts] have been launched.
An increasing number of Fortune 1000 companies are now enhancing their exposure in India. Particularly the office asset class has attracted a lot of attention from global investors. Foreign developers have forged or trying to forge joint ventures in India. Especially, Japan and China will be investing in the country’s real estate sector in the next couple of years. This has also seen a return of equity investments in India.
Recent policy reforms such as RERA, 100% FDI in construction and easing of REIT’s regulations have encouraged international investors to look at the Indian realty market with great enthusiasm. The proclivity for development is clear from the current government’s recent efforts. RERA has come into force from May 1st 2017 and the Central Government has asked the states to have their own regulations to implement RERA according to their own format.
World’s leading multilateral institutions and fund managers have taken note of all these reforms and have reposed their faith in India’s progress. In JLL’s global estate transparency [biennial index] for 2016, India’s tier -1 cities secured a rank 36 amongst 109 countries, a major improvement from the 48 rank it secured in 2012.
Global Investors like Goldman Sachs, Qatar Investments, Blackstone Group, to name a few have been investing in Indian realty assets for the last few years. The current development of RIETs and RERA are among the major factors that will help improve India’s transparency ranking further during the next assessment year 2018. The speed with which the reforms are taking place, India will move from the ‘semi-transparent’ market group to the ‘transparent’ market group by 2018 and may soon turn into a lucrative realty market for global investors. The new government is all set out to put Indian real estate on the world market with the help of all types of reforms.