India’s real estate developers opened investment opportunity worth Rs 62,000 cr: Report

Mumbai: Real estate developers across India have embarked on a significant expansion drive, acquiring a total of 2,335 acres of land valued at an astounding Rs 39,742 crore in 2024, according to a new report released by JLL. These acquisitions set the stage for the potential development of 194 million sq. ft of real estate, with an estimated investment surpassing Rs 62,000 crore.

Strategic Land Acquisitions Fuel Growth Across India

The report highlights that Tier I cities continue to dominate the real estate market, accounting for 72% of the total land purchases. However, there was a noticeable shift towards smaller urban centres, with Tier II and III cities collectively acquiring 28% of the land, amounting to 662 acres. This trend indicates the growing recognition of untapped potential in these emerging markets and signals a broader shift in real estate development away from traditional metropolitan hotspots.

Cities like Nagpur, Varanasi, Indore, Vrindavan, and Ludhiana emerged as unexpected real estate hotspots in 2024. The growing prominence of these cities reflects a wider trend toward geographical diversification in India’s real estate development landscape, moving beyond the usual metropolitan strongholds.

MMR and NCR Lead Land Acquisition Activity

The Mumbai Metropolitan Region (MMR) led the charge in land acquisition for 2024, with developers securing 407 acres through 19 separate deals. This marked a 41% increase compared to the previous year. Significant transactions included deals of 50 acres or more in key micro-markets such as Khalapur, Palghar, and Khapoli.

Meanwhile, the National Capital Region (NCR) stood out in terms of 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 deals.

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Focus on Residential Developments to Meet Growing Demand

A remarkable 81% of the land acquired in 2024 by developers was earmarked for residential developments, which is expected to translate into a massive 158 million sq. ft of development. This indicates strong optimism regarding the housing demand in the country, with developers prioritizing the residential sector for their future supply pipeline.

Samantak Das, Chief Economist at JLL India, emphasized that the continuous homebuying interest makes the residential sector a top priority for developers as they look to expand their portfolios in the coming years.

Land Acquisition Projected to Need Rs 62,328 Crore Investment

The extensive land acquisitions by developers across India are expected to require a capital investment of approximately Rs 62,328 crore for development, based on current construction costs. The top seven cities, including MMR and NCR, have emerged as the focal points for this real estate potential, accounting for 91% of the estimated capital needed for development.

Although Tier II and III cities have witnessed significant land acquisitions, they account for just 9% of the total capital required. This reflects the cost differentials between major metropolitan areas and smaller urban centres, which tend to have lower construction costs and distinct real estate formats.

Real Estate Sector Shows Strong Growth Post-COVID-19

2024 has been a standout year for the real estate sector, with both the office and residential asset classes showing strong performance, surpassing expectations post-COVID-19. As developers continue to invest in their land bank, India’s real estate market is set to experience a sustained upward growth trajectory.

The JLL report underscores the growing confidence of developers in India’s real estate market, with strategic land acquisitions laying the foundation for future growth across both metropolitan and emerging urban centres.