National Capital Region (NCR) has always been a hotspot for the country’s top
developers for land acquisition. Horizontal expansion of the city towards the suburbs
has worked out well, with the development of new residential corridors and office
business districts. Factors like proximity to the national capital, developing physical and
social infrastructure, and growing need for housing and amenities, have attracted
developers from all over the country. Various Mumbai and Bangalore-based developers
are looking to expand in the North market.
Access to institutional capital and partnership with foreign companies have helped
Indian developers with funding. In most transactions, sellers are either state authorities
or developers with high indebtedness. In 2022, nearly 745 acres of land was
transacted in 23 transactions valued at INR 7,000 crores (USD 875 million). The city
of Gurgaon led in the number of deals, with 12 transactions recorded in 2022,
followed by Noida with 6 major land deals. Residential development was the top
usage, with 15 out of 23 transactions, totalling close to 665 acres, acquired for
proposed residential developments.
Residential developments leads
With the heavy population growth, majorly due to increased migration, housing has
become a challenge in Delhi. The city started to grow horizontally towards its
peripheries, with the suburbs of Gurgaon and Noida leading the housing market.
Gurgaon and Noida have been the major residential hubs for the last two decades.
However, the change in Delhi’s masterplan in 2013 liberalised height restrictions, which
allowed developers to build high-rise buildings. Eventually, the city started to witness
multi-storey apartments, with developers like DLF, Godrej Properties, Raheja and Unity
Group launching their projects in the city.
With the growing need for housing in the entire NCR and the relevant state
governments promoting new housing projects by encouraging developer participation
through incentives, the demand for land banks has gone up exponentially. Since 2014
housing sale in NCR was the highest in 2022, with 38,356 housing units sold in the
top 5 cities. National players like Godrej and Max Estates, as well as local developers
like Elan and M3M, were amongst the top land buyers. Established developers who
earlier used to opt for a joint-development model have now shifted to the outright land
purchase model.
Non-Core NCR gaining traction
Moving away from the submarkets of Gurgaon and Noida in core NCR, developers are
eyeing corridors of Panipat, Sonipat and Bahadurgarh to develop townships. Prominent
transactions include M3M buying 350 acres in Panipat, Godrej Properties buying 50
acres in Sonipat and Royal Green Realty buying 42 acres in Bahadurgarh, all for
proposed residential developments.
Way ahead
Going forward, a lot more transactions are expected to occur in 2023, with growing
demand for housing, developers expanding their landbanks and institutional funds
pumping in capital. Upcoming infrastructure developments in the region like Dwarka
Expressway, Noida International Airport, Delhi-Mumbai Industrial Corridor and Delhi
Meerut Rapid Rail Transit System will act as further demand boosters.