Realty check

Indian real estate market moves up a tier, becomes semi-transparent.

According to Jones Lang LaSalle's 2006 Real Estate Transparency Index, the Indian real estate market has improved considerably in transparency to accelerate its ranking by one tier from low-transparency in 2004 to semi-transparency this year.

There are five tiers in the study, ranging from highly transparent to opaque.

India was ranked 41 in this study that cuts across 56 countries and territories.

India's improvement from low-transparency to semi-transparency was helped by the availability of market information, improved general accounting and reporting processes, and substantial improvement among market participants about the legal process relating to contract enforcement and legal relief.

"The upward trend displayed by India in the transparency index augurs well for the cross border investments waiting to enter the domestic real estate markets as yields from emerging markets like India are far better when compared to stable and high transparency markets like Hong Kong or the US," said Manisha Grover, head of the Strategic Consulting & Research, Jones Lang LaSalle, India.

She added that India's legal regulatory framework, professional standards and transaction processes continue to evolve and set the pace for an even greater improvement in overall transparency in the immediate term.

Overall, 14 countries moved up a full tier in the five-tier transparency ranking system and none slipped back. Additionally, many more countries earned higher transparency scores while remaining in the same tier. India is one of them.

In Asia Pacific, there have been marked improvements, with more than half of the countries studied in the region moving up the real estate transparency tiers.

REITs, in particular, have enhanced the need for greater transparency wherever they are introduced in Asia Pacific.