Mumbai, March 12 (IANS) Real estate developers across India embarked on an ambitious expansion drive, acquiring 2,335 acres of land valued at a staggering Rs 39,742 crore in 23 key cities during 2024, according to a JLL report released on Wednesday.
These strategic land acquisitions have laid the foundation for potential development of 194 million sq. ft of real estate which will require an estimated investment exceeding Rs 62,000 crore, the report states.
It highlights that while Tier I cities maintained their dominance, accounting for 72 per cent of the land purchases, the year witnessed a significant shift towards smaller urban centres as well. Tier II and III cities claimed a substantial 28 per cent share of the acquisitions, translating to 662 acres of land.
This trend signals a growing recognition of the untapped potential in these emerging markets.
Notably, cities like Nagpur, Varanasi, Indore, Vrindavan, and Ludhiana emerged as unexpected hotspots in this land acquisition spree.
Their prominence in the year’s transactions underscores a broader trend of geographical diversification in real estate development, moving beyond the traditional metropolitan strongholds, the report observes.
This strategic pivot towards a more balanced urban development model not only reflects changing market dynamics but also hints at a future where growth is more evenly distributed across India’s urban landscape.
The JLL analysis indicates that the transacted per acre land cost increased continuously in the last three years from around Rs 11 crore in 2022 to Rs 17 crore in 2024.
After the disruption due to COVID-19, the year 2024 stands out as the best-performing one for real estate across office and residential asset classes reflected by the strong performance indicators of both demand and supply.
As the real estate sector’s upward growth trajectory continues, developers are investing steadily in building their land bank across the country for their future development pipeline, the report states.
The Mumbai Metropolitan Region (MMR) emerged as the frontrunner in land acquisition for 2024, with developers securing approximately 407 acres through 19 separate deals, accounting for 17 per cent of the year’s total land transactions.
This represents a significant 41 per cent increase from the previous year’s 288.9 acres.
Notable transactions included single deals of 50 acres or more in micro-markets such as Khalapur, Palghar, and Khapoli.
While MMR led in terms of land area acquired, the National Capital Region (NCR) surpassed other cities in the number of deals closed, with 36 land transactions throughout the year.
Within NCR, Gurugram saw the highest activity with 21 deals, followed by Noida with 14, and Ghaziabad with one.
“In 2024, as much as 81 per cent of the land acquired during the year by developers was earmarked for proposed residential developments. This would translate into a massive development potential of 158 million sq. ft and cater to the ever-increasing housing demand in the country.
“Developers are banking on the continued homebuying interest in the residential sector as a top priority for augmenting their new supply pipeline,” said Samantak Das, chief economist at JLL India.
This extensive land acquisition is projected to necessitate a substantial capital investment of Rs 62,328 crore for development based on the current cost of construction.
The top 7 cities emerged as the focal point of this real estate potential and are expected to attract the lion’s share of the projected capital requirements.
They witnessed land acquisitions totaling 1,673 acres. This substantial urban land acquisition translates to 91 per cent of the projected total capital needed for development, underscoring the concentrated focus on major metropolitan areas in the country’s real estate landscape, according to the report.
The growth in land acquisitions in Tier II and III cities, while significant, translated to a more tempered financial outcome due to lower construction costs and distinct different real estate formats.
These emerging urban centres account for just 9 per cent of the total estimated capital required for development, highlighting the significant differentials between major metropolitan areas and smaller cities, the report added.
–IANS
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