Land transactions in India

The year 2023 stands out as a record-breaking year for real estate across all asset classes reflected by the strong performance indicators of both demand and supply. As the real estate sector continues its journey on a steep growth curve, developers are building a robust supply pipeline by investing in acquisition of land across the country. A total of 1,947 acres of land valued at INR 32,203 crore in 111 separate deals were acquired by real estate developers in 2023 as compared to 1,603 acres in 2022 (valued at INR 18,112 crore), up by 21% Year-on-Year (Y-o-Y). The land acquired has a development potential of ~176 million sq. ft.

The average transacted value of land has touched INR 16.5 crore per acre in 2023, up by 46% as compared to the previous year. This staggering increase is attributable to higher land transactions in Tier 1 cities and established prime micro markets. In addition, Mumbai Metropolitan Region (MMR), the most expensive real estate market in the country doubled its share in total land area transacted in India from 7% in 2022 to 15% in 2023 and contributed significantly to this increase in per acre transacted value.

Key trends:

• In 2023, Delhi NCR led both in terms of number and area of land deals, with 415 acres acquired across 36 separate transactions valued at approximately INR 9,120 crore. Select established players acquired multiple land parcels across Delhi NCR.
• Bengaluru followed Delhi NCR, with close to 305 acres of land acquisitions across 14 separate transactions valued at INR 3,412 crore.
• MMR saw 24 separate land deals spread over 289 acres valued at INR 11,222 crore – the highest in the country. This translates into average transacted value of INR 39 crore per acre, which is 2.3 X of the average pan India land value.
• In Chennai, a total of 209 acres of land was acquired valued at INR 1,220 crore across 8 separate deals.
• Out of the 1,947 acres acquired in 2023, 1,365 acres (~70%) was acquired for proposed residential projects with a development potential of around 130 million sq. ft. These residential developments would likely have an estimated sales potential of INR 138,750 crore.

Going forward in 2024, 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. Infrastructure changes, specially enhanced metro connectivity between various micro-markets, will throw up new pockets of growth within each city.

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