High land costs cool developers’ acquisition appetite

Land acquisition by real estate companies fell 56 per cent annually to 1,445 acres in the January-September period this year amid rising costs and a high base effect, according to Anarock.

Real estate consultant Anarock said India's land acquisition market has moderated, with developers balancing expansion against rising land costs and project viability.

"The first nine months of 2026 saw 76 land deals for around 1,445 acres, signalling a more cautious and selective acquisition strategy," says Anarock Group MD & CEO, Land Services, Mayank Saksena. In the year-ago period, there were 99 deals for nearly 3,292 acres.

The consultant noted that JDAs (joint development agreements) with landowners accounted for one in every four land deals in the first nine months of 2026. Of the 76 deals closed in the period, at least 19 were JDAs. "With project economics becoming more important, developers are increasingly turning to JDAs with existing landowners," he said. Under a JDA arrangement, developers can access land and build projects via a partnership rather than an outright purchase. JDA transactions rose from 10 in 2022 to 30 in 2025. The share of total JDA deals increased from around 12 per cent to nearly 24 per cent in 2025 and further to 25 per cent in the first nine months of 2026.

Commenting on the data, Suresh H A, Managing Director of Bengaluru-based Sanjeevini Group, said the market is witnessing a clear shift from aggressive land banking towards strategic acquisitions. "Developers are increasingly prioritising parcels with strong connectivity, established social infrastructure, clear development potential and sustainable demand prospects," he said. Mukesh Choudhary, MD of Accuspace, said the land acquisitions trend reflects a shift towards a more cautious, strategic and opportunity-driven approach to real estate development. "This changing investment approach also creates an opportunity for Tier-2 cities to emerge as alternative growth destinations for real estate developers," he added.

Lalit Parihar, MD of Aaiji Group, which sells land in Dholera, Gujarat, said real estate developers are becoming more selective about land economics, project viability and future demand potential.

ABOUT THE AUTHOR

The Hans India