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Tier I cities commanded 89 per cent of the total investment capital required for land acquisitions in 2025, even as they accounted for just 52 per cent of the total land area purchased. As per JLL, developers across India's major urban centers acquired more than 3,093 acres of land through 149 separate transactions during the year, marking a 32 per cent year-on-year increase in activity.
The investment pattern highlighted a significant disparity between established metropolitan hubs and emerging markets. While Tier I cities secured the vast majority of capital, Tier II cities received only 11 per cent of total investments despite representing 48 per cent of the land transactions by area. This gap underscored the significantly higher land costs in major metros and the lower capital intensity of real estate projects planned for emerging urban centers like Ahmedabad, Amritsar, Aurangabad, Ayodhya, Ballari, Goa, Indore, Lucknow, Mohali, Nagpur, Panchkula, Raipur, Satara and Vadodara. "2025 has been a record-breaking year for India's real estate sector, with developers acquiring approximately 3,000 acres of land across 20 major cities and investing close to Rs 55,000 crore, a clear reflection of tremendous market confidence," said Lata Pillai, Senior Managing Director & Head of Capital Markets, JLL India. As per JLL, residential development emerged as the primary growth engine for the sector, with developers allocating 78 per cent of the acquired land, totaling 2,398 acres, specifically for housing projects. Developing these parcels of land will require an estimated construction investment exceeding Rs 72,000 crore. "Developing projects on these land parcels will require an estimated Rs 52,000 crore + in external financing. As traditional banking channels face regulatory constraints and evolving risk appetites, this substantial capital requirement presents compelling opportunities for Alternative Investment Funds (AIF) and private credit providers to deploy innovative, tailored financing solutions that address diverse funding needs across project lifecycles," Pillai added. The total construction capital required to develop the land parcels acquired in 2025 is estimated to exceed Rs 92,000 crore. Beyond the residential sector, office development represented the second-largest segment with a capital requirement of approximately Rs 8,700 crore, indicating continued demand for modern workspace solutions and corporate expansion. JLL also revealed that individual landowners remained the backbone of the acquisition market, accounting for 65 per cent of the total transacted area. This momentum carried into the first quarter of 2026, with approximately 900 acres already acquired across key markets, valued at nearly Rs 18,000 crore. This period was highlighted by a significant transaction in Mumbai's MMR, where an 11-acre parcel sold for Rs 5,400 crore, signalling sustained investor appetite for high-value urban centers. (ANI)
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