Joint Development Deals Surge

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    India’s real estate market is experiencing a significant boost, as developers nationwide are accelerating land acquisitions and joint development agreements (JDAs) to leverage the growing demand for residential properties in major urban centers.

    As published by the Mint, the country’s fifth-largest economy has fueled a post-pandemic resurgence in the property market, leading developers to expand their project pipelines through strategic land deals and partnerships.

    Following a seven-year slump, residential demand has rebounded sharply, prompting well-capitalized developers to purchase land outright while others pursue JDAs to adopt an asset-light strategy and enter new markets. These two approaches allow developers to navigate diverse financial and operational needs, ensuring agility in a competitive market.

    Prominent developers with significant capital reserves are leading land purchases to ensure full control over new developments. Godrej Properties Ltd., the top-selling residential developer last year, has made 10 land acquisitions in fiscal year 2025 (FY25) in cities such as Gurugram, Greater Noida, Mumbai, Ahmedabad, and Indore.

    JDAs have become particularly valuable in areas with limited land availability. Through revenue or area-sharing arrangements with landowners, JDAs allow developers to lower initial costs and mitigate risks associated with land acquisition. Recently, Mahindra Lifespace Developers Ltd. partnered with GKW for a 35-acre development in suburban Mumbai’s Bhandup area, highlighting the popularity of JDAs in the metro regions.

      The real estate sector saw a sharp increase in residential sales across India’s top eight property markets, reaching 572,191 units in FY23-24, up from 467,298 units the previous year, according to Liases Foras, a property research firm. The April-June quarter of FY24 alone saw 126,095 units sold, reflecting a market recovery that is boosting land acquisitions.

      According to CBRE India, land transaction volumes from January to September rose by 65% year-on-year, totaling approximately 1,700 acres. The Delhi-National Capital Region (NCR) accounted for the largest share of activity with 32%, underscoring its growing importance as a focal point for developers.

      Developers like Prestige Group, Signature Global, and Shriram Properties Ltd. have each focused on strategic land acquisitions in various regions. Bengaluru-based Prestige Group acquired 17.45 acres in Whitefield for ₹462 crore, adding to land purchases valued over ₹5,000 crore across the last six quarters. Signature Global, based in Gurugram, plans a ₹1,500 crore investment to acquire land, aiming to expand into markets like Noida.

        JDAs have become crucial, especially in urban centers where land scarcity and high prices make outright acquisitions challenging. In these arrangements, developers can tap into valuable land without high initial investments, maximizing potential returns.

        In densely populated Mumbai, JDAs enable developers to gain access to land without large upfront expenditures. JDAs enhance internal rates of return (IRRs) and help mitigate risks tied to high land costs, according to Shobhit Agarwal, managing director and CEO of Anarock Capital.

        JLL India reports that 556 acres of JDAs were signed in the first half of 2023. Shriram Properties Ltd., headquartered in Bengaluru, recently utilized a JDA to enter the Pune market by collaborating on a six-acre site in Undri. The company has pursued JDAs to support growth while maintaining an asset-light approach, allowing it to expand quickly while minimizing capital requirements.

          Land prices have surged 20-30% over the past two to three years but now appear to be stabilizing. This trend has encouraged developers to adopt a balanced strategy, combining outright land purchases with JDAs to sustain their growth while managing costs effectively.

          Ahmedabad-based Arvind SmartSpaces Ltd. has expanded its portfolio through a mix of JDAs and outright purchases, securing land in Ahmedabad, Bengaluru, and Surat. CEO Kamal Singal noted that Arvind is focusing on both acquisition models to reach its goal of ₹5,000 crore in business development in FY25, underscoring the sector’s reliance on versatile growth strategies.

          Developers are increasingly adopting hybrid strategies, mixing JDAs with outright purchases to optimize investment while expanding geographically. This model provides flexibility to developers, allowing them to navigate market changes more effectively while still capturing new opportunities.

            India’s real estate sector remains poised for growth, with both JDAs and land acquisitions expected to be central to developers’ strategies. By balancing these approaches, companies can adapt to market conditions and secure their positions in established and emerging markets alike.

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