According to a report by Meraqi, 70% of Bengaluru real estate assets, both residential and commercial, are developed through joint development agreements (JDAs) due to soaring land prices.
In the past three years, land prices in Bengaluru, along with other major cities like Mumbai, NCR, Pune, Chennai, Ahmedabad, Kolkata, and Hyderabad, have risen significantly, with a 20% to 30% increase in the IT hub alone.
Before 2021, outright sale transactions were more common for land monetization, but the surge in land values has led to a preference for JDAs.
Joint Development Agreements have become crucial for the growth of the real estate sector in India. They offer a win-win situation for both landowners and developers, allowing landowners to monetize their land without losing ownership rights and developers to access prime locations without hefty upfront costs.
In Bengaluru, many landowners opt for JDAs for residential and commercial projects due to the positive market sentiment. JDAs are expected to yield 2 to 2.5 times higher returns than outright transactions.
However, between 2015 and 2020, some landowners faced challenges with JDA partnerships due to regulatory changes such as the introduction of RERA and GST, leading to uncertainty regarding tax, legal, and regulatory aspects.
Credits: Hindustan Times