Big real estate developers have been buying up land in recent years, driven by high demand for residential real estate after the pandemic. These include both listed and unlisted players. For example, listed companies Godrej Properties, Oberoi Realty, Prestige Estates and Brigade Enterprises have purchased over 400 acres, while even private developers such as Birla Estates have purchased around 35 acres.
Approximately 180 transactions covering 5,215 acres have occurred in the past two years, according to data from Anarock Research. This comes at a time when home sales are set to hit multi-decade highs in 2023.
Godrej Properties is leading the pack of land buyers, according to data from real estate services firm TruBoard Partners.
This was in stark contrast to the company's pre-COVID-19 business model, which opted for an “asset-light model.” Analysts said the buyout change came as the company recognized business potential in residential real estate. The company has purchased land parcels in Bengaluru, Gurugram and Nagpur in recent months.
A spokesperson for Godrej Properties did not respond to emails, but company chairman Pirojsha Godrej said in its annual report for fiscal year 2023 that it believes India's residential real estate sector is growing. .
“We are able to achieve our goal of growing sales at 20% annually, while at the same time providing an opportunity to expand margins in line with our goal of achieving 20% ROE,” Godrej said. says.
Bangalore-based Prestige Estates Projects is not far behind. The company has acquired around 120 acres of land in Bangalore and Mumbai metropolitan areas in the last two years.
Prestige Projects, a subsidiary of the company, has already acquired a prime sea-front land parcel near Marine Lines and Charni Road in south Mumbai from DB Realty for over Rs 740 crore, and has I am developing several projects. Analysts say the company's land acquisition is part of its ambitious sales goals.
It expects sales bookings to increase by 55% in FY24, reaching an all-time high of Rs 20,000 crore. We have set a target of Rs 25,000 crore for FY25, or a growth rate of 25%. Another Bangalore-based player Brigade Enterprises
Mumbai-based Oberoi Realty has bought 35 acres of land in the area, while Lodha Group has bought around 8 acres of land. Private companies like Birla Estates, part of the Aditya Birla group, have also joined the party and purchased 34.4 acres of land in Pune and Bangalore.
According to experts, the main reasons for the rise in land parcels by leading real estate agents are consolidation and the continued boom in the housing sector. “Strategic land purchases by major corporations are driven by continued increased market influence and favorable access to capital resources,” said Sangram Baviskar, Founding Member and Managing Director, Real Estate, TruBoard Partners. he said.
He believes that continued expansion with a clear trend towards existing developers has given them the confidence to purchase land parcels both in their own areas and even explore opportunities in other areas. I am. A case in point is Godrej Properties, which is not only buying land in all its existing markets of Mumbai, NCR and Pune, but also expanding into regions such as Hyderabad, a new market for the group.
Anuj Puri, Chairman, Anarock Property Consultants, said, “Many of the top players are looking for more land as their residential projects have seen strong sales growth and demand remains strong even today. “If we do so,” he said, adding, Looking at price trends over the past three years, land prices have increased by at least 25% across major cities.
Price growth not only varies by city and small market, but also depends on several other factors, such as infrastructure development in and around the land parcel, proximity to major infrastructure projects (upcoming or operational), etc. factors also come into play, he said. He said.
