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Real estate developers acquire 3,000+ acres in 2025, unlocking ₹52,500 crore financing opportunity: JLL
Tier I cities attracted 89% of the capital required for land acquisition followed by Tier II cities that received only 11% of the total investments
Real estate developers acquired over 3,000 acres of land in 2025, unlocking an estimated financing opportunity exceeding ₹52,500 crore, a 32% year-on-year increase. The top seven cities continue to dominate the real estate investment landscape and are projected to absorb nearly 89% of the total capital required to develop these land parcels. Delhi NCR and Hyderabad together account for an 18% share of this capital allocation.
Real estate developers acquired over 3,093 acres of land across 149 transactions valued at ₹54,818 crore in 2025, a 32% year-on-year increase. This momentum is expected to unlock approximately 229 million sq. ft. of development over the next two to five years, according to a report by JLL.
Mumbai's MMR recorded the country's largest land deal by value in Q1 2026, with an 11-acre parcel selling for ₹5,400 crore (approximately ₹490 crore per acre). This underscores strong investor appetite and the continued strength of high-value urban centers that are set to drive the next phase of growth, it said.
The strong momentum has continued into 2026, with approximately 900 acres acquired across key markets in Q1 2026, valued at nearly ₹18,000 crore. This reflects strong developer confidence and sustained demand for land, it said.
Developing these newly acquired land parcels in 2025 will require an estimated ₹92,000 crore + in total construction capital. Of this substantial investment, external financing needs are projected to exceed ₹52,000 crore over the medium term. Meeting this significant capital requirement will likely necessitate a diversified funding approach, combining bank financing, private equity, and institutional capital to support the ambitious development pipeline across multiple real estate asset classes, it said.
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The top seven cities continue to dominate the real estate investment landscape and are projected to absorb approximately 89% of the total capital required to construct these newly acquired land parcels. This significant concentration of funds reflects both the premium nature of projects planned for these prime locations and the higher construction costs associated with developments in major metropolitan centres, the report said.
Tier 1 cities attracted almost 90% of the capital required for land acquisition
As for investments, Tier I cities accounted for 89% of the capital required for land acquisition, yet represented just 52% of the total land area purchased. Meanwhile, Tier II cities received only 11% of total investments, despite accounting for 48% of land transactions by area acquired. This disparity highlights the higher land costs in major metros and points to significant growth opportunities in emerging markets as India’s real estate landscape continues to evolve.
Tier 1 cities included Mumbai-MMR, Chennai, Bengaluru, Pune, Kolkata, Hyderabad and Delhi-NCR. Tier II cities include Ahmedabad, Amritsar, Aurangabad, Ayodhya, Ballari, Goa, Indore, Lucknow, Mohali, Nagpur, Panchkula, Raipur, Satara and Vadodara.
Meanwhile, emerging urban centres are gaining traction, with Tier II and III cities witnessing land acquisitions totalling 1,475 acres during the year. However, despite substantial land banking activity in these emerging markets, they account for only 11% of total estimated construction costs. This lower capital intensity is primarily due to the less capital-intensive nature of real estate projects planned for these locations, resulting in lower overall construction costs than in major metropolitan areas, it said.
“2025 has been a record-breaking year for India’s real estate sector, with developers acquiring approximately 3,000 acres of land across 20 major cities and investing close to ₹55,000 crore, a clear reflection of tremendous market confidence. Developing projects on these land parcels will require an estimated ₹52,000 crore + in external financing. As traditional banking channels face regulatory constraints and evolving risk appetites, this substantial capital requirement presents compelling opportunities for Alternative Investment Funds (AIF) and private credit providers to deploy innovative, tailored financing solutions that address diverse funding needs across project lifecycles,” said Lata Pillai, Senior Managing Director and Head of Capital Markets, JLL India.
“With strong demand fundamentals and a growing financing ecosystem, India’s real estate sector is poised for sustained growth, a momentum that has carried into 2026, with approximately 900 acres already acquired across key markets in Q1 2026,” she said.
Residential development emerges as the primary growth engine
In line with the land acquisition usage, residential development emerges as the primary growth engine, capturing approximately 76% of the total estimated capital funding requirement. The scale and complexity of residential funding present compelling opportunities for AIFs to deploy innovative financing solutions, particularly through strategic first-mile acquisition financing and last-mile completion funding structures.
Residential development emerges as the primary growth engine, with developers allocating 78% of the acquired land to housing projects, totalling 2,398 acres and requiring an estimated construction cost of ₹72,000 crore.. This concentration reflects robust market confidence in India's urban housing demand, driven by rapid urbanisation trends.
Office development represents the second-largest segment with an estimated capital requirement of approximately ₹8,700 crore+ (~10% of total capital required for construction), indicating robust corporate expansion and continued demand for modern workspace solutions. This investment level suggests confidence in India's services sector growth, especially in the GCCs and the ongoing need for Grade A office infrastructure in major business districts, the report said.
Individual landowners account for 65% of transactions
The analysis of India's land supply landscape reveals that individual landowners constitute the backbone of the developer land-acquisition market, accounting for 65% of the total area transacted across 62 deals, reflecting the fragmented nature of land ownership across various markets. The JLL report said that land seller profiles show significant variation across India's top 7 metropolitan cities, shaping the land acquisition landscape in each market.
Individual landowners drive land sales in several key markets, a trend most pronounced in Chennai at 93% and also leading in Mumbai-MMR, Bengaluru and Pune. In contrast, corporate entities are the principal sellers in Hyderabad, indicating markets where land assets are largely held by companies. Delhi-NCR stands out as an outlier, with government bodies being the dominant source of land, accounting for 63% of all transactions.
