India's Real Estate Sector Requires ₹62,000 Crore Investment: JLL Report Highlights

India's real estate sector witnessed unprecedented land acquisitions in 2024, with developers securing 2,335 acres across 23 major cities in 134 transactions valued at Rs 39,742 crore. This land has a development potential of 194 million sq. ft, with residential projects dominating at 158 million sq. ft. This was stated by JLL in its latest report.

While Tier I cities accounted for 72% of acquisitions, smaller urban centers saw an increasing share at 28% (662 acres). Cities like Nagpur, Varanasi, Indore, Vrindavan, and Ludhiana emerged as key hotspots, signaling a shift towards a more geographically balanced development approach.

The Mumbai Metropolitan Region (MMR) led in land area acquisition, securing 407 acres across 19 deals, a 41% rise from 2023. However, Delhi-NCR recorded the highest number of transactions (36 deals), with Gurugram leading at 21. The highest transacted land value was also in NCR, at Rs 11,339 crore.

Residential developments accounted for 81% of the acquired land, necessitating a capital investment of Rs 49,000 crore. The recent RBI rate cut and fiscal incentives have boosted housing demand, further fueling real estate investments. Other sectors like industrial, warehousing, office, retail, and hospitality saw limited developer interest.

With a projected Rs 62,328 crore investment required for development, 91% of this capital is concentrated in the top seven cities, underscoring their continued dominance. Tier II and III cities, though growing, account for only 9% of the estimated capital needs due to lower costs.

The surge in acquisitions presents new opportunities for financial institutions. With regulatory constraints on traditional funding, Alternative Investment Funds (AIFs) and private credit are expected to play a significant role in financing real estate projects.

As developers pursue an aggressive land banking strategy across metro and emerging cities, India's real estate landscape is set for continued growth, balancing expansion in established markets with opportunities in smaller cities.