Several land deals have been finalised over the last few months, largely on account of the increasing demand for residential projects. Real estate developers are strategically investing in land parcels, encouraged by robust residential sales. According to experts, this trend is expected to remain steady in 2023, with developers expanding their land banks on the back of an expected moderation in interest rates, growing demand for housing, and support from institutional funding agencies.The top developers who bought land parcels for various developments in FY23 include Godrej Properties, Birla Estates, Gaurs Group, Sobha, Oberoi Realty, Ajmera Realty, Mahindra Lifespaces, M3M Group, Max Estates and Gera Developers, among others.According to a report by Anarock Research, in the financial year 2022–23 (FY23), approximately 87 separate land deals were sealed, cumulatively accounting for over 1,862 acres. The previous year (FY22) saw 44 land deals, accounting for approximately 1,649 acres, being closed across various cities. Among the top seven cities, Mumbai Metropolitan Region (MMR) saw the most with 25 land deals accounting for over 267 acres, followed by the National Capital Region (NCR) with 23 land deals spread across 274 acres. In terms of total land area transacted in the top seven cities, Chennai topped the list with about 292 acres changing hands in nine separate deals.Another report by JLL India has said that real estate developers have acquired a record 2,181 acres of land in the last 17 months, between January 2022 and May 2023. This has an estimated development potential of around 209 million square feet (msf). Valued at over Rs 26,000 crore, the acquisition comprised 104 separate land deals. About 84 percent of the 2,181 acres (around 1,822 acres) are for proposed residential developments.Delhi NCR, Chennai, MMR, and Bengaluru lead in terms of total land area transacted (about 1,576 acres), accounting for a 72 percent share. With a development potential of around 150 msf, the land was acquired in 79 separate deals.Developers are acquiring land from auctions by state corporations, from other realtors wanting to monetise their land holdings, and also through the insolvency route.In a recent interview with PTI, Godrej Properties’ Executive Chairman Pirojsha Godrej said the company will continue to add new land parcels for future development, but it will scale down the pace. Seeking to encash strong housing demand, realty firm Godrej Properties will acquire multiple land parcels this fiscal year with a sales revenue potential of around Rs 15,000 crore post-development. He said the company is in discussion with many landowners across major cities for both outright purchases and entering into JDAs.Among big-ticket deals in FY23, the company acquired an 18-acre land parcel in Kandivali, Mumbai, for Rs 750 crore to develop a luxury housing project with an estimated revenue potential of about Rs 7,000 crore. On June 15, the company announced the acquisition of a 7.44-acre land parcel in the upscale residential area of New Alipore in Kolkata.Ajmera Realty & Infra India Ltd has also acquired 5,017 square meters (sq mt) of land in Mumbai from Tata Communications for Rs 76 crore to build a residential project.In March, real estate developer Emerald Haven Realty acquired three acres of land in an emerging northern Bengaluru suburb for the development of a residential project with a revenue potential of Rs 250 crore. Located in Rachenahalli, the land parcel is close to Metro Rail Phase-2B, an upcoming metro phase in Bengaluru.Birla Estates Private Limited, the real estate arm of the Aditya Birla Group and housed under Century Textiles and Industries Limited, purchased a 28.6-acre land parcel in eastern Bengaluru with a potential revenue of Rs 3,000 crore, the company said in a regulatory filing. Located in the micro-market of Sarjapura Road, the development will comprise residential housing along with convenience retail options.Samantak Das, Chief Economist and Head of Research and Real Estate Intelligence Service, India, JLL, said that the objective of acquiring land parcels is to construct residential properties. “This interest is expected to continue going forward. After all, land is working capital for developers. Of the land acquired so far, almost half has been earmarked for residential development,” he told Moneycontrol.Anckur Srivasttava of GenReal Advisers said that the largest component of land transactions is developer purchases. Residential, mostly plotted, is the prime driver. Barring developer platforms, private equity (PE) firms or non-banking financial companies (NBFCs) are not involved in quite a few of these land acquisition transactions. Also, warehousing is no longer the key driver. Land prices in most established warehouse destinations have become unviable.Experts say that there have been few land deals since 2010. “Today, land deals are more prudent; the value of the land is much fairer and not overvalued. Besides, only select builders have access to capital. With infrastructure developments taking place and metro connectivity opening up new areas for growth, the appetite of funds and builders to purchase land has increased,” said Pankaj Kapoor of Liases Foras.Abhinav Joshi, Head of Research, India, Middle East & North Africa, CBRE, is of the view that expansion is taking place across the board, with players from Bengaluru and Mumbai expanding their land portfolio as part of their market share expansion plan following pick-up in demand for real estate. Acquisitions are taking place both in existing and upcoming locations.According to a report by CBRE, almost 6,800 acres have been acquired by real estate developers and investors for more than $12.2 billion between 2018 and 2022 to construct greenfield realty projects. Of this, 37 percent was residential, 24 percent industrial and warehousing, and 29 percent was mixed-use development.As a developer, “we continuously scout for opportunities to acquire good land parcels in keeping with our business plans. Accordingly, we have participated in and acquired a couple of land parcels in recent auctions conducted by the Noida Authority & HSVP Haryana in Noida and Gurugram respectively. Our debt-free balance sheet and strong development credentials make us one of the strong contenders in these land auctions,” said Routhu Nagaraju, Chief Executive Officer (CEO), Experion Developers.Gaurav Gupta, Director of SG Estates and Joint Secretary of CREDAI National, said that there is increased demand for land. While western and southern developers are backed by PE funding, many developers in the NCR have to depend on internal accruals. Funding is largely dependent on deep pockets and the track record of the developer.