Most of the land transactions were for proposed residential development indicating the positive sentiments amongst the developer community to deploy capital for building a robust supply pipeline
Real estate developers have acquired around 2,181, acres of land area in the last 17 months (January 22 – May 2023) valued over Rs 26,000 crore, with an estimated development potential of around 209 million sq. ft in 104 separate land deals. Around 578 acres (27%) of the land, out of these 2,181 acres, was acquired in the first five months of 2023 alone. The data indicates that branded developers have successfully closed many land transactions in top metros as well as tier 2 and 3 cities driven by the resilience shown by the real estate sector.
Delhi NCR, Chennai, Mumbai Metropolitan Region and Bengaluru lead in terms of total land area transacted accounting for 72% share (around 1,576 acres) having a development potential of around 150 million sq. ft. in 79 separate land deals.
Pune,Kolkata and Hyderabad together account for 9% share. The rest was contributed by cities like Surat, Ahmedabad, Jaipur, Lucknow, Nagpur, Panchkula, and Kurukshetra.
In Delhi NCR, submarkets of Panipat and Gurgaon lead with a combined share of 73% in Delhi NCR land transactions in the last 17-month period.
In terms of the number of transactions Delhi NCR and Mumbai Metropolitan Region lead with 53 transactions recorded in the last 17-month period.
Real estate developers who actively acquired land included Godrej Properties, M3M, Max Estates, Birla Estates, and Mahindra Lifespaces among others.
With a surge in demand for housing, developers are actively acquiring land for new housing projects. In 2022, residential sales registered a decadal high with 215,000 units sold across the top seven cities, which is almost like the 2010 sales of 216,762 units. Sales in 2022 increased by 68% Y-o-Y with more than 50,000 units sold in each of the four quarters. Also, Residential launches during the same period stood at 247,000 units, the highest in over a decade and next to the previous high of 281,000 units in 2010.
Further in Q1 2023, sales of 62,000 housing units were recorded marking the highest quarterly sales in the last 15 years despite rising interest rates and prices in the last 12 months. This growth has been fuelled by a collective effort of all stakeholders, who swiftly adapted to changing consumer preferences.
Samantak Das, Chief Economist and Head of Research and REIS, India, JLL, said, “Over 100 land transactions with a development potential of 209 million sqft in the last 17 months are a visible indication of the positive sentiment for the real estate sector. Interestingly, most of the land transactions were for proposed residential development due to the surge in demand leading to optimism in developers to build a robust supply pipeline. These residential transactions are estimated to have a sales potential of Rs 122,000 crore . Going forward in 2023, we expect land transactions to remain steady with developers expanding their land banks on the back of expected moderation in interest rates, growing demand for housing, and support from institutional funding agencies. The launches of new residential projects are expected to strengthen further through new land acquisitions in strategic locations and growth corridors.’’
