India's realty developers went on a big expansion drive in 2024, buying a whopping 2,335 acres of land for Rs 39,742 crore in 23 major cities, according to a JLL report published on Wednesday.
These bulk deals open up the possibility of developing about 194 million sq. ft of real estate at an estimated investment of more than Rs 62,000 crore, says the report.
Though Tier I cities continued to be the leaders with 72% of all land sales, Tier II and III cities also witnessed a good trend in the direction of small cities with a substantial 28% market share, equivalent to 662 acres, showing increasing demand for upcoming urban cities.
Of these, Nagpur, Varanasi, Indore, Vrindavan, and Ludhiana emerged as surprising hotspots for land deals, illustrating a wider pattern of geographic diversification of real estate investments beyond the major metros.
The move indicates shifting market trends and hints at an emerging future in which urban development becomes more dispersed throughout the nation.
The JLL report also pointed out a consistent rise in per-acre land prices in the last three years, from around Rs 11 crore in 2022 to Rs 17 crore in 2024. Following the pandemic-induced disruptions during COVID-19, 2024 has been the best year for the real estate sector with both the office and residential segments registering strong growth in demand and supply.
As land banks are increased by developers for upcoming projects, the Mumbai Metropolitan Region (MMR) took the lead in land purchases, acquiring around 407 acres in 19 transactions, which represents 17% of the overall deals made in 2024. This is a 41% increase compared to 288.9 acres in the last year.
Some prominent deals in MMR featured individual transactions of 50 acres or more in major micro-markets like Khalapur, Palghar, and Khapoli.
Though MMR had the maximum land area bought, the National Capital Region (NCR) took the lead in terms of deals, with 36 transactions during the year. In NCR, Gurugram took the lead with 21 deals, followed by Noida (14) and Ghaziabad (1).
"In 2024, 81% of land purchased by developers was for suggested residential projects, amounting to an enormous development potential of 158 million sq. ft to cater to the country's growing housing needs. Developers are giving preference to the residential segment in order to widen their new supply pipeline," said Samantak Das, chief economist at JLL India.
The massive land purchases are anticipated to call for a capital outlay of Rs 62,328 crore, using existing construction prices.
India's prime seven cities figured as the core of this real estate growth, experiencing overall land purchases of 1,673 acres. These metropolitan areas will absorb 91% of the total anticipated capital expenditure, reflecting the focused emphasis on key cities.
Conversely, the Tier II and III cities expansion, while substantial in terms of land space, recorded comparatively less financial impact owing to lesser construction expenses and diversified real estate structures. These new cities represent a mere 9% of the overall estimated development investment, underscoring the economic difference between major metropolises and smaller cities, the report concluded.
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