India’s real estate sector saw a sharp surge in land acquisition activity in 2025, with a clear tilt toward the country’s largest metropolitan markets.
According to JLL, developers acquired over 3,093 acres across 149 transactions during the year, marking a 32% increase compared to the previous year. However, the distribution of capital revealed a stark imbalance: Tier I cities accounted for 89% of the total investment value, despite representing just 52% of the land area transacted.
In contrast, Tier II cities—while comprising nearly half (48%) of the total land acquired—drew only 11% of the investment capital. This divergence highlights the significantly higher land costs in major metros, alongside the relatively lower capital requirements for projects in emerging cities such as Ahmedabad, Indore, Lucknow, Nagpur and Vadodara.
Lata Pillai, Senior Managing Director and Head of Capital Markets at JLL India, described 2025 as a “record-breaking year” for the sector. Developers invested close to Rs 55,000 crore in land acquisitions across 20 major cities, underscoring strong market confidence.
Residential development emerged as the dominant driver of growth. Nearly 78% of the acquired land—about 2,398 acres—has been earmarked for housing projects. The construction of these developments is expected to require investments exceeding Rs 72,000 crore.
Pillai noted that more than Rs 52,000 crore in external funding will likely be needed to execute these projects. With traditional bank financing facing regulatory and risk-related constraints, this gap is expected to create opportunities for alternative investment funds (AIFs) and private credit players to step in with tailored financing solutions.
Overall, the total capital required to develop the land acquired in 2025 is estimated to surpass Rs 92,000 crore. Beyond residential projects, office developments represent the second-largest segment, with an anticipated investment of around Rs 8,700 crore—reflecting steady demand for modern commercial spaces.
The report also highlighted the continued prominence of individual landowners, who accounted for 65% of the total land transacted during the year.
Momentum has carried into 2026. In the first quarter alone, developers acquired around 900 acres across key markets, with transactions valued at approximately Rs 18,000 crore. Notably, a major deal in Mumbai’s metropolitan region saw an 11-acre parcel change hands for Rs 5,400 crore, signalling sustained investor appetite for high-value urban assets.
(With inputs from ANI)