Economy

Developers buy 1,757 acres in a year despite COVID-19 pandemic

File photo of a residential apartment in Chennai for representation   | Photo Credit: KARUNAKARAN. M

The COVID-19 pandemic might have severely dented economic growth but not the appropriate of developers to buy land.

According to data collated by Anarock, a real estate consulting group, some of the real estate developers, including M3M Group, Godrej Properties, K. Raheja Corp and Shapoorji Pallonji Group, turned out to be top land buyers last year.

While M3M acquired land worth ₹900 crore in Noida, Godrej Properties bought land worth ₹700 crore in Bengaluru.

Real estate developers and entities sealed around 45 separate land deals cumulatively accounting for over 1,757 acres of area across the top seven cities between Q3 2020 and November 2021.

Of the total transacted land area, approximately 69% or 1,205 acres are proposed to be developed into multiple residential projects across these cities.

The total development potential of these deals works out to at least 45-50 million sq. ft. of residential area, according to Anarock data.

From an estimated 28 residential land deals closed across the cities in the last year, land-starved Mumbai Metropolitan Region (MMR) witnessed 11 land deals involving 768 acres of area, a 64% share of the total 1,205 acres of planned residential development across the top cities.

The NCR came a distant second with four separate deals accounting for 12% of the total land deals with approximately 150 acres earmarked for development. This includes three deals for a total of 77 acres in Gurugram, and one deal for over 73 acres in Noida.

Kolkata saw two separate deals for over 92 acres on a joint development agreement basis.

Hyderabad witnessed two separate land deals for a total of 78 acres.

Bengaluru saw five separate deals for a total of 59 acres earmarked for residential development, Pune saw three deals for approximately 42 acres, and Chennai saw one deal for over 16 acres, as per available data.

The top developers who bought land parcels for residential developments include Godrej Properties, Sunteck Realty, Ashiana Housing, Mahindra LifeSpaces, M3M Group, and Runwal Developers.

Liquidity issues

“The last seven to eight months before COVID-19 (March 2020) saw limited land deals as the real estate industry was grappling with liquidity issues at the time,” said Anarock Group vice- chairman Santhosh Kumar.

“Then COVID-19 brought the sector to a virtual standstill for three to four months. For about a year, developers preferred to either service their debts or complete previously-launched projects,” he said.

“However, from Q3 2020, activity resumed and several landowners who previously held fast to their land put their holdings up for sale. Resultantly, some prominent deals took place in the last one year, at more or less the same price points as the previous year,” he further said.

“Many developers with the financial wherewithal saw this period as opportune to secure good land parcels in key micro-markets across the top seven cities,” he said.

Besides proposed residential developments, industrial, commercial, data centres, and retail also saw land acquired for development.

Out of the total of 45 land deals for over 1,757 acres, at least six deals for 411 acres are earmarked for a logistics and industrial park and township.

Of this, two deals for over 275 acres were closed in Gurugram, followed by two deals in Chennai for over 83 acres, and one each in Howrah and MMR for 31 acres and 22 acres, respectively.

For mixed-use developments, three land deals for over 58 acres were closed — one each in MMR, Chennai and Gurugram.


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Printable version | Jan 17, 2022 2:36:26 PM | https://www.thehindu.com/business/Economy/developers-buy-1757-acres-in-a-year-despite-covid-19-pandemic/article37861208.ece

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