Joint development agreements for 1,546 acres of land inked in the last 18 months; NCR, Bengaluru lead with maximum deals
Proposed residential developments take up more than 97% share of the JDAs; Delhi-NCR, Bengaluru and Mumbai top cities in terms of number of deals signed
Real estate developers and landowners joined hands to develop 1,546 acres of land and inked a total of 56 separate Joint Development Agreements (JDAs) over the past 18 months. Residential developments had a share of more than 97% (1,501 acres) in these signed agreements offering a development potential of 110 million sq. ft with an estimated gross development value of around ₹99,460 crore, according to a report by JLL.
Out of the total 1,546 acres, the remaining 45 acres were allocated for the development of commercial projects which primarily included lease-based office projects.
The city share analysis indicates that bigger cities like Delhi NCR, Bengaluru, and Mumbai lead in the number of deals, while smaller cities like Ahmedabad and Surat top the charts in terms of area transacted. Collectively, 36 deals took place in the three bigger cities, capturing 64% of the total number of deals, although they accounted for just 26% of the area.
Delhi-NCR leads in terms of number of transactions
Three cities (Delhi NCR, Bengaluru, and Mumbai) accounted for a substantial ₹83,927 crore which is over 84% of the total residential GDV ( ₹99,460), the report said.
Delhi NCR led in terms of number of transactions, with 20 JDAs signed since 2023, covering approximately 233 acres of land. These agreements have the potential for a total development of 36.5 million sq. ft. Within Delhi NCR, a significant portion of these deals, covering 151 acres, were signed in Gurugram alone.
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Prominent real estate players have signed multiple binding agreements across Gurugram, primarily alongside the emerging corridors of Dwarka Expressway and Southern Peripheral Road. The remaining deals in NCR were in NCT of Delhi, Ghaziabad, Faridabad, and Sonipat.
Bengaluru stood second with 9 deals for over 102 acres with a development potential of approximately 11 million sq. ft. Multiple deals were recorded in Yelahanka, Whitefield and Old Madras Road. Notably, one large sized transaction was recorded in North Bengaluru of over 60 acres.
Mumbai witnessed 7 transactions spanning across 62.5 acres, with a development potential of 9.9 million sq. ft, the report showed.
In terms of area, cities in Gujarat led with a share of 66%. Ahmedabad witnessed three deals spanning across 720 acres and Surat saw a single deal of 300 acres.
Why do developers prefer JDAs?
Out of the total 1,546 acres, around 990 acres of JDAs were signed in 2023 alone, the remaining 556 acres were signed in the first six months of 2024. The collaboration between the developers and landowners in the last 18 months has yielded a development potential of over 120 million sq. ft.
Although many national developers now prefer outright land purchases, joint development agreements remain a viable option for those aiming to adopt an asset-light strategy while expanding into new regions.
Development agreements have proven to be highly successful, allowing developers to expand into new cities and micro markets and landowners to benefit in return. Additionally, several well-known international developers who entered the Indian real estate sector in recent years have chosen to follow this strategy with positive results.
“The residential segment has been at the forefront in terms of land Joint Development Agreements (JDAs) signed over the past 18 months. Proposed residential developments have a significant share of more than 97% (1,501 acres) in these signed agreements offering a development potential of 110 million sq. ft with an estimated gross development value of around ₹99,460 crore,” said Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.
“The demand for housing has been steadily increasing in recent years, prompting real estate developers to consistently introduce new housing projects. In 2023, there was a significant increase in the number of new housing units launched across the top 7 cities of India, demonstrating a growth of 19% when compared to 2022,” he added.
"Availability and the cost of land are key factors causing smaller-sized transactions in these larger urban areas. However, in terms of residential Gross Development Value (GDV) the three cities (Delhi NCR, Bengaluru, and Mumbai) accounted for a substantial ₹83,927 crore which is over 84% of the total residential GDV ( ₹99,460)” said Nishant Kabra, Head – Capital Markets (North and West India), India, JLL
JDAs to witness traction going forward
Looking ahead, JDAs are poised to remain an attractive strategy, presenting a win-win solution for all stakeholders involved. Real estate developers can gain access to desirable locations in big cities and therefore development agreements are a great entry strategy for them. Also, entering into land development agreements can benefit real estate developers by reducing the hassle of obtaining land approvals and meeting regulatory requirements.
On the other hand, landowners can unlock the value of their land and leverage the execution capabilities and brand value of an established developer. This collaborative approach allows both sides to maximize their advantages and create successful developments, the report said.