Developers picking up sizeable land parcels in Tier II/III cities: JLL report

Bengaluru: Tier II, III cities in India accounted for a whopping 44.4 per cent of the 3,294 acres of land acquired by real estate developers between January 2022 - October 2023, according to a new report released by property consultancy JLL on Friday. 

The report credited increasing demand and buying capacity of customers for this.

“The trend of launching plotted developments and low-rise apartments is specifically prevalent in these cities,” said Samantak Das, who heads research at the consultancy, adding that the proposed plotted development projects were locked with a value of over Rs 3,163 crore. 

Nearly 92 per cent of the 1,461 acres acquired in these smaller markets, through 17 separate deals, were earmarked for residential projects, with a development potential of around 64 million square feet. 

Developers are also eyeing holiday home projects as people in metros are looking for second homes in vacation destinations like Shimla, Rishikesh, Goa and so on, the report highlighted. 

During the 22-month period under review, Panipat, Ludhiana, Nagpur and Panchkula collectively accounted for a 75% share in overall tier II,III city land transactions.

In southern India, geographies such as Ambur, Mahabalipuram, Coimbatore, Trichy and Mysuru roped in developer attention for plotted residential projects.

According to the report, entry of realty brands with an established track record, besides execution capabilities and access to institutional capital, have further enhanced buyer confidence in these smaller geographies. For instance, DLF Ltd’s first project in Panipat sold out within an hour of its launch while Godrej Properties sold phase 1 of its plotted development project in Sonipat within two days of its launch, the report illustrated.

On the flip side, developers are also acquiring land to build relevant supply pipelines for the future. Prominent names like Godrej Properties, M3M, Eldeco Group and Omaxe Group have entered or expanded in these emerging markets with recent land acquisitions, the report noted.