The real estate industry in India experienced a 32% year-on-year increase in land acquisitions in 2025. Developers acquired 3,093 acres through 149 transactions valued at Rs 54,818 crore, as per a report released by JLL. This acquired land is projected to unlock nearly 229 million square feet of development over the next two to five years, reflecting strong developer confidence and sustained demand.
It was highlighted that Tier I cities accounted for 89% of the total capital deployed, despite representing only 52% of the land acquired. Conversely, Tier II cities, which accounted for 48% of land transactions, attracted only 11% of investments, indicating lower land costs and emerging growth opportunities.
In the first quarter of 2026, the momentum continued with around 900 acres acquired across key markets, valued at almost Rs 18,000 crore. The Mumbai Metropolitan Region recorded the largest deal, with an 11-acre parcel transacted for Rs 5,400 crore.
Developing these land parcels will necessitate over Rs 92,000 crore in construction capital, with estimated external funding needs exceeding Rs 52,000 crore. The report suggested that this would likely lead to increased participation from Alternative Investment Funds (AIFs), private credit providers, and institutional investors.
Tier I cities are anticipated to absorb nearly 89% of the capital required for upcoming developments due to higher project costs and premium real estate demand in major metros. Residential development has been the primary growth driver, accounting for 78% of land allocation and around 76% of total funding requirements, with an estimated construction cost exceeding Rs 72,000 crore.
While office development is projected to require about Rs 8,700 crore in capital, indicating sustained demand for Grade A office spaces. The report also observed that individual landowners dominated the supply side, representing 65% of total transactions.
In the industrial and emerging asset segments, developers are increasingly exploring opportunities in data centers, logistics parks, and other alternative real estate classes.
