Regulatory Reforms brings in major Global Investors to Indian Real Estate

By : 360 Realtors

16 May, 2017

On account of the positive reforms taking place in the regulatory framework of the Indian Real Estate industry, the sector has been showing an upwards growth and the outlook on industry has changed for good. The various policy initiatives taken including the much desired Real Estate Regulatory Act (RERA) is making the realty market in India very inviting for large institutional investors.

According to a research done on recent investment trends, the extremely constructive changes happening in the regulatory framework of the Indian real estate is making the place a hotbed for foreign investors and is helping the country move in right direction thus inspiring confidence amongst the global investors. These major developments will have serious and favorable effect on property in India like   improved transparency and professionalism, increased rate of consolidation, and have also lead to the establishment of Real Estate Investment Trusts (REITs). The Indian economy on the whole is set to develop and progress. As of now every metric, namely Global Competitiveness Index (by World Economic Forum), Ease of Doing Business (by World Bank), or Sovereign Ratings (by S&P and Moody's), indicates that the country is showing considerable improvements.

There is an increase in the number of Fortune 1000 Companies who want to enhance their exposure here. The Commercial Property in India in particular has managed to attract attention from a lot of global investors. Several leading foreign realty brands have or want to come up with joint ventures in India. For example, China and Japan will be investing in the coming years.  The private equity players are also expected to remain strong. In 2015 approx $2 billion was invested by foreign equity firms into the Indian realty sector. And if things go favorable, it is expected that by the year 2018,              Indian real estate sector shall develop from the 'semi-transparent markets' group to the 'transparent markets' group. As per global real estate transparency (biennial) index for 2016, India's tier-I cities were at 36th position out of total 109 countries, an achievement from the 48th position secured in 2012. 

Not just for commercial segment but these reforms have been beneficial for Residential Properties in India as well.  Owing to better returns and relatively better economic growth, the global investors’ proclivity for Indian realty industry is on the rise. 100% FDI in construction, implementation of RERA and easing of REIT’s regulations have attracted the interest of several international investors towards the Indian realty market. The enforcement of RERA on 1st May 2017 and the central government’s request to all the states to form their own set of rules and regulations as per their own format indicates the government’s inclination towards the progress and development of the industry.

The RERA would protect the consumers against the builder malpractices and would provide them all the necessary information desired by them thus taking care of all their concerns. The government regulatory authority would help solving builder-buyer disputes in the minimum possible time and would reduce unnecessary project delays and reduce all types of uncertainties in project funding. 

Across the globe, several leading fund managers and multilateral institutions owing to these drastic and positive changes happening have reposed their faith in country’s progress. Global Investors like Blackstone Group, Goldman Sachs, Qatar Investments, etc. have been making investments in Indian