Indian real estate is still demonstrating high appetite for land acquisition, going by recent reports. This indicates that a lot is going right for the sector in spite of periodic roadblocks.
Indian real estate has witnessed a remarkable recovery over the last couple of years, standing up stronger in spite of the coronavirus pandemic. While sales figures and demand have returned to pre-pandemic levels, there remain some periodic hurdles like rising input costs and so on. However, amidst all this, the industry is soldering on, a fact demonstrated through the steady flow of land deals across the India.
Land acquisition appetite is quite high amongst real estate developers and other industry players even after the COVID-19 pandemic. Research studies indicate that several organizations wrapped up 28 mega land deals which cover a whopping 1,237 acres in total for 2022 in India. The striking part is that between January and June last year, with the second COVID-19 wave hitting strong, there were 14 land deals which comprised 763 acres in all.
What it Basically Indicates
- Real estate developers with organized balance sheets and funds are snapping up prime land parcels at major Indian cities and other locations. They are looking to build multiple projects across varied segments and asset classes.
- Top names purchasing land parcels included Oberoi Realty, Godrej Properties, Birla Estates, Gaurs Group, Mahindra LifeSpaces, Hetero Group, Mapletree Logistics, and Microsoft to name a few.
- 18 deals in this tally covered around 351 acres allotted for residential real estate projects throughout multiple Indian cities for 2022.
- 3 deals were seen for more than 115 acres which pertained to the establishment of data centres. 2 deals covered 63 acres with an aim to build warehousing and logistics projects.
- 4 deals were observed for more than 108 acres, dedicated towards mixed-use projects.
- A single land deal was seen for a whopping 600 acres in the city of Hyderabad.
- Hyderabad has seen positive trends in this context, with the highest land deals. 5 deals for 715 acres were seen for the city, taking up more than 59% of the total deals from January. These include the deal for 600 acres as mentioned.
- Bangalore had 3 deals for 140 acres in total. These will be used for mixed-use, residential and logistics realty projects.
- The National Capital Region (NCR) saw 5 deals and contributed 9% of the total deal count in this duration. These deals covered 106.3 acres in all, including two for 91 acres in the city of Gurgaon and a deal each for Faridabad, Delhi, and Noida. The upcoming projects will be in the warehousing, residential and mixed-use segments.
- Pune had 5 deals for 91.1 acres and contributed 7% of the total nationwide tally according to reports. All of these projects will be in the residential segment.
- MMR (Mumbai Metropolitan Region) which has acute scarcity of land, had 5 deals covering 54.85 acres, which will be used for residential projects.
- Chennai had only a single deal for 5.5 acres with a mixed-use project in the works.
- There were two deals in Ahmedabad, one in Nagpur and one at Sonipat as per reports.
The land acquisition spree does not end there; leading real estate developers are snapping up land parcels at prime locations. An example is the Prestige Group, which is planning to deploy Rs. 7,500 crore for projects covering 16 million sq ft in Mumbai over the next four or five years. The investment will cover six projects including hospitality, office and residential ventures in areas like Marine Lines and Mahalaxmi along with Bandra, Worli, the Bandra-Kurla Complex (BKC) and Mulund.
The Prestige Group, a leading real estate player in Bangalore, has been acquiring land steadily for its projects. Two projects will be office spaces along with a five-star hotel. The Mulund project will cover a whopping 30 acres that the Group has acquired. It has also acquired 2 acres in prime Mahalaxmi outright. Both these land deals have seen the Group invest more than Rs. 800 crore. It has inked deals with DB Realty and ABIL while the Pali Hill project will involve redeveloping the society. Many such developers are planning mega land acquisition drives in order to come up with new projects for tapping into pent-up market demand. The Government has also taken pro-active measures to cool rising input costs and this will prove beneficial for the industry in the long run. This could give long-term relief to developers and keep property prices in check, paving the way for higher viability of newer projects and launches. In the meantime, land acquisition appetite continues to be on the upswing throughout the country. The Hyderabad deal could be the precursor of bigger things to come.
