By Raghavendra Kamath
Land costs have shot up 30-40 % throughout the nation since 2019, as parcels of burdened builders/land house owners are being offered out. Besides, land parcels presently are absolutely priced, mentioned builders and consultants concerned in such offers.
“Earlier big developers were negotiating with smaller develoepers whose projects were stuck and got value benefit. Those land parcels were sold out. Today, land parcels are owned by traditional owners who are not stressed.Hence they are demanding higher prices than before,” mentioned Mayank Saksena, chief government, land companies at Anarock Property Consultants.
Sakena mentioned since gross sales velocity is nice now, it’s supporting increased costs. “Consolidarion is still happening. Today those who have excess land parcels or those changing strategy are selling their land parcels. The sellers also include a select few who have gone to NCLT,” Saksena mentioned.
According to Anarock, about 28 land offers for over 1,237 acres had been signed between January to May 2022. In distinction, the January-June interval of 2021 noticed simply 14 land offers for a complete of 763 acres .
Top builders akin to Godrej Properties, Oberoi Realty, Mahindra LifeSpaces, amongst others purchased land parcels.
Developers agree with Saksena.”Cleaner land parcels out there with conventional house owners have seen worth revision because of paucity. With confidence in gross sales coming again in a giant manner, there are a lot of consumers now out there. The turnaround within the residential actual property market can be including momentum to this enhance in costs,” mentioned Mohit Malhotra, managing director, Godrej Properties.
Godrej purchased a lot of land parcels in cities akin to Pune, Bengaluru, Haryana and others within the final couple of months.
Malhotra mentioned from a short-term perspective, there seems to be additional room for an uptrend in costs, buoyed by the rising sale costs of flats/plots and so forth. However, in the long run, he expects the costs to stabilise in step with the stabilisation of end-product sale costs.
Saurabh Shatdal, managing director, capital markets at Cushman & Wakefiled, mentioned demand throughout asset courses has considerably picked up put up lockdown and there was vital churn in actual property provide.
“This resulted in some key markets in each city emerging as hot destinations for new developments resulting in high demand for land. Land being one of the most important raw material for real estate witnessed great demand and hence the land prices have appreciated by 15-20% in such markets. However, this is not something which has happened across the board,” Shatdal mentioned.
He added that main builders proceed to promote effectively and to assist the rising demand, uptake of recent tasks has change into a key strategic transfer for nearly all organised builders. “The historic gap in valuation of land prices has reduced given the ability of developers to pay more resulting in multiple transaction closures,” he mentioned.
He mentioned three kinds of builders are investing in new tasks. The first ones are nationwide builders who’ve a powerful model and wholesome stability sheets. The second are robust regional gamers who’re backed by non-public fairness gamers and the third class consists of robust gamers in particular micro markets which have been prudent in managing their cashflows and have grown sustainably.
Abhishek Kiran Gupta, chief government at knowledge analytics agency CRE Matrix, mentioned new land buy is proscribed to giant builders. Brownfield redevelopment tasks are on appreciable rise and are being primarily picked up by smaller builders, he mentioned.
“Only large developers can afford to buy large tracks of land towards building large townships. We would like to strongly reiterate that Indians are structurally migrating towards community living compared to standalone housing properties,” he mentioned.
Recent offers
March 2022 : Godrej Properties acquires a 9 acre land parcel in Pune
April 20222: Godrej Properties buys 58 acre land in Nagpur
April 2022: Mahindra Lifespaces buys 11.5 acre land in Pune
May 2022: Oberoi Realty inks 18 acre Thane land deal.
Source: www.financialexpress.com”