Almost 44.4 percent of land deals transacted by developers between January 2022 and October 2023 were in Tier II and III cities, totalling 1,461 acres being acquired across 17 separate land deals. Additionally, 3,294 acres of total land were acquired by developers in the period, according to a report by JLL.
Established real estate developers are now targeting new markets, by entering Tier II and III cities in the country, to launch projects. Data indicates that driven by the increasing demand and buying capacity of the customers, branded developers have successfully closed many land transactions in these cities, the report added.
"This trend has been gaining momentum in northern and western India, in particular. Panipat, Ludhiana, Nagpur and Panchkula collectively contributed to around 75 percent of the total 1,461 acres of the acquired land," it said.
In the north, developers are venturing into cities like Panipat, Sonipat, Kurukshetra, Panchkula, Lucknow, Jaipur and Ludhiana, and in the west, cities like Nagpur, Khalapur, Surat and Palghar have attracted national level players.
"The trend of launching plotted developments and low-rise apartments is specifically prevalent in these cities. In the last 22 months, these land transactions for proposed plotted developments were locked with a value of over Rs 3,163 crore," Samantak Das, Chief Economist and Head of Research and REIS, India, JLL said.
Buyers push towards the Tier II, Tier III cities too
The report added that real estate players entering these cities have enhanced the home buyer confidence, as these developers have a good track record and strong execution capabilities, along with access to institutional capital.
"These developments have proven successful and are very well received by the buyers. This can be seen with the recent success of developers in these cities," JLL said.
According to various market sources, DLF’s first project in Panipat sold out within an hour of its launch; Godrej Properties was able to sell phase 1 of its plotted development project in Sonipat within two days of its launch. In south India, plotted residential projects were launched in cities such as Ambur, Mahabalipuram, Coimbatore, Trichy and Mysuru.
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