INR 62,000 Cr Needed for New Land Development in 2024: JLL

• A total of 2,335 acres were secured by developers across 23 major urban centers.
  
• Residential projects dominate the planned usage, with about 158 million sq. ft designated for housing usage.
• Twenty-five land deals clocked in Tier II and Tier III cities in 2024, the highest since 2022.
• Delhi NCR led in terms of transacted value of land at ~ INR 11,339 crore.
• Top 7 cities capture 91% of the estimated capital requirement based on current cost of construction. 

MUMBAI, MARCH 12, 2025: The year 2024 marked a watershed year in India's real estate sector, characterized by a surge in land acquisitions. Developers across the country embarked on an ambitious expansion drive, securing a vast 2,335 acres of land through 134 distinct transactions in key twenty-three cities. These strategic land acquisitions, valued at a staggering INR 39,742 crore, laid the foundation for potential development of 194 million sq. ft of real estate.

While Tier I* cities maintained their dominance, accounting for 72% of the land purchases, the year witnessed a significant shift towards smaller urban centers. Tier II and III** cities claimed a substantial 28% 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.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.
 

Land Transactions - A Historic Snapshot

^{Note: Joint Development agreements (JDAs) are not included for the analysis. Only outright purchases by real estate developers are considered for the study.
*Tier 1 cities include the top 7 markets in India – Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai Metropolitan Region and Pune.
**Tier II and III cities include all the other markets not covered in Tier I cities.}

Our analysis indicates that the transacted per acre land cost increased continuously in the last three years from ~ INR 11 crore in 2022 to INR 17 crore in 2024. Post COVID-19, 2024 stands out as the best-performing year 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 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% of the year's total land transactions. This represents a significant 41% 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, 81% 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. The recent reduction in policy rate by the Reserve Bank of India and the fiscal impetus given to the middle class in the last union budget are likely to keep the demand growth trajectory elevated. These developments will support the upcoming residential supply. Other asset classes such as industrial and warehousing, office, retail and hospitality witnessed limited developer interest for proposed land bank use, when compared to the traction in the residential sector” said Dr Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.
 

Capital requirement exceeding INR 49,000 crore for Residential sector development

This extensive land acquisition is projected to necessitate a substantial capital investment of INR 62,328 crore for development based on 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% of the projected total capital needed for development, underscoring the concentrated focus on major metropolitan areas in the country's real estate landscape. 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 centers account for just 9% of the total estimated capital required for development, highlighting the significant differentials between major metropolitan areas and smaller cities.

"The year 2024 witnessed the highest land acquisitions by developers in the last 3 years across key 23 cities. This has created a substantial opportunity for financial institutions to provide tailored solutions for real estate developments. According to JLL's estimations, the capital needed to develop these newly acquired lands exceeds INR 62,000 crore. Given the regulatory constraints on traditional funding avenues for developers at various project stages, there is a growing demand for innovative and bespoke financing structures. This scenario presents a particularly promising landscape for Alternative Investment Funds (AIFs).Private credit is poised to maintain its critical role in fulfilling the sector's financial needs," said Lata Pillai, Senior Managing Director & Head of Capital Markets, India, JLL

While MMR led in land acquisition for 2024, Delhi-NCR and Bengaluru have emerged as the primary hubs for development. These two cities together represent over 64% of the projected capital requirements among the top eight urban centers. MMR's land acquisitions, despite being substantial, were predominantly in peripheral areas (84% of total acquisitions). These outlying locations had lower costs of construction and less development potential compared to more central areas, which explains the disparity between land acquisition and capital needs.

India's real estate sector has evolved into a dynamic financial ecosystem. Traditional banking institutions and non-banking financial companies now share the stage with private equity firms and venture capitalists, creating a robust and versatile financing landscape. This diversification of capital sources has empowered borrowers with enhanced flexibility and expanded opportunities, allowing them to tailor their funding strategies to specific project needs and market conditions. The real estate landscape in India is poised for a strategic evolution, with developers adopting a multi-tiered approach to land acquisition. While the top 7 cities are expected to remain the primary focus for land banking, there's a growing recognition of the potential in Tier II and Tier III markets. This dual strategy aims to create a balanced and opportunistic development pipeline across various urban centers. In top 7 cities, developers are likely to continue their aggressive land acquisition, capitalizing on established markets and high demand. Simultaneously, they are maintaining a steady presence in Tier II and III cities, acknowledging these areas as future growth hotspots.

^{Note: NCR includes Gurgaon, Noida (Greater Noida, Yamuna Expressway) and Ghaziabad
MMR includes Mumbai, Thane, Khapoli, Kharghar, Palghar, Khalapur
Additonally, the 23 cities covered are Ahmedabad, Amritsar, Ayodhya, Bangalore, Chennai, Coimbatore, Dholera, Goa, Hyderabad, Indore, Kasauli, Kochi, Kolkata, Lucknow, Ludhiana, MMR, Mohali, Nagpur, NCR, Pune, Shimla, Varanasi, and Vrindavan}

JLL is India’s premier and largest professional services firm specialising in real estate. The Firm has grown from strength to strength in India for the past two decades. JLL India has an extensive presence across 10 major cities (Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Ahmedabad, Kochi, and Coimbatore) and over 130 tier-II and III markets with a cumulative strength of over 15,000 professionals. The Firm provides investors, developers, local corporates, and multinational companies with a comprehensive range of services. These include leasing, capital markets, research & advisory, transaction management, project development, facility management and property & asset management. These services cover various asset classes such as commercial, industrial, warehouse and logistics, data centres, residential, retail, hospitality, healthcare, senior living, and education. For further information, please visit jll.co.in