Even as the real estate sector has been witnessing a huge demand since the first of 2022 after a two-year hiatus due to the coronavirus pandemic, a report shows that tier-2 and tier-3 cities in India have received a significant 44.4 per cent share (or 1,461 acres) out of the total land deals of 3,294 acres by real estate developers in India.
According to the latest JLL report, just four cities Panipat, Ludhiana, Nagpur and Panchkula collectively contributed to around 75 per cent of the total 1,461 acres of acquired land in tier-2 and tier-3 during January 2022-October 2023.
“Increasing demand and buying capacity of the customers, branded developers have successfully closed many land transactions in these cities,” JLL said in a statement.
In the 22-month period from January 2022 to October 2023, around 3,294 acres of land were acquired by real estate developers in the country. A substantial proportion (44.4 per cent) of these land deals were transacted in Tier 2 and 3 cities, with a total of 1,461 acres being acquired across 17 separate land deals, according to the report.
In the north, developers are venturing into cities like Panipat, Sonipat, Kurukshetra, Panchkula, Lucknow, Jaipur, and Ludhiana, and in the west, cities like Nagpur, Khalapur, Surat and Palghar have attracted national level players.
“Panipat, Ludhiana, Nagpur and Panchkula collectively contributed to around 75 per cent of the total 1,461 acres of acquired land,” it said.
Out of the total 3,294 acres of land acquired during the past 22 months, 91.6 per cent (or 1,339 acres) is for proposed residential developments, with a majority being planned as plotted residential developments/units.
“Developers are primarily focusing on low-rise and plotted developments in these cities as the locals are accustomed to living in these types of formats. In fact, around 1,015 acres have been earmarked for plotted developments and valued at over Rs 3,163 crore,” JLL said.
Samantak Das, chief economist and head (research) and REIS-India, JLL, said, “Strategic land acquisitions by real estate developers in Tier 2 and 3 cities to enter new markets and leverage the rising demand for quality projects is on the rise. The trend of launching plotted developments and low-rise apartments is specifically prevalent in these cities.”
He said that in the last 22 months, these land transactions for proposed plotted developments were locked with a value of over Rs 3,163 crore. The launch of new residential projects is expected to strengthen further through new land acquisitions in strategic locations and growth corridors.
Recently, DLF’s first project in Panipat sold out within an hour of its launch; Godrej Properties was able to sell phase 1 of its plotted development project in Sonipat within 2 days of its launch.
Prominent developers like Godrej Properties, M3M, Eldeco Group and Omaxe Group have also entered or expanded in these emerging markets with recent land acquisitions.
(The intro and the headline have been updated to add more inputs)
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