A significant transformation is underway in India's real estate sector. Developers are aggressively moving beyond the saturated metro markets to tap into burgeoning demand for plotted developments and villas in smaller cities and towns. This strategic shift marks a new chapter in the country's property landscape, challenging the long-held dominance of metropolitan areas.
The New Geography of Growth
Major real estate firms are now launching plotted projects in a diverse set of locations. Key cities witnessing this surge include Mangaluru, Indore, Nagpur, Prayagraj, Amritsar, and Kochi. Even the peripheral areas of large urban centers like Bengaluru and Mumbai are seeing increased activity in this segment.
Industry leaders are leading the charge. Godrej Properties Ltd, while maintaining its focus on top-tier cities for apartments, has been actively acquiring land for plotted ventures in smaller urban centers. The appeal is clear: plotted projects offer attractive price appreciation and carry significantly lower construction risk for developers, making them a compelling product.
These developments involve a developer acquiring a large land parcel, securing all necessary legal approvals, and installing essential infrastructure like boundary walls, internal roads, water supply, drainage, and electricity. The prepared land is then subdivided into individual plots for sale.
Price Appreciation and Buyer Sentiment
The financial metrics strongly favor this trend. Data from Bengaluru's Prestige Group reveals that plot prices have skyrocketed. As of September 30, plot prices saw a 17% year-on-year increase, reaching an average of ₹8,425 per square foot. In contrast, apartment prices in their portfolio rose by only 6% to ₹13,769 per sq. ft during the same period.
This price surge is not limited to peripheries. In Ayodhya, for instance, The House of Abhinandan Lodha (HoABL) launched a project named The Sarayu in the 2023-24 fiscal year at ₹10,820 per sq. ft. The prices have already appreciated to ₹14,450 per sq. ft.
According to Mayank Saksena, Managing Director and CEO of Land Services at Anarock Property Consultants, the buyer profile is evolving. "Unlike earlier when plots were bought mainly as investment, more buyers want to construct homes and actually use them," he said. He added that the inclusion of better amenities and clubhouses has fueled high price appreciation, with corner plots being particularly sought after.
Expanding Horizons and Future Pipeline
The scale of this shift is substantial. From January to June this year, approximately 504 acres were purchased for plot and villa projects in cities like Indore, Ahmedabad, Panipat, Bengaluru, and the Mumbai Metropolitan Region, as per Anarock data.
Developers have ambitious expansion plans. Delhi-based Omaxe Ltd has already launched plotted projects in Amritsar, Indore, Prayagraj, Ratlam, and Palwal over the past year. Their Managing Director, Mohit Goel, noted a healthy mix of interest from end-users, local business owners, NRIs, and investors. The company's pipeline includes launches in Bareilly, Ludhiana, Bhatinda, Vrindavan, and Patiala among others in the coming year.
Similarly, HoABL added 278 acres (12 million sq. ft) of plots in FY 2024-25 across locations like Khopoli, Neral, Alibaug, and Goa. Their future cities include Nagpur, Amritsar, Varanasi, and Shimla. Chairman Abhinandan Lodha emphasized addressing traditional challenges of land buying like title security and liquidity through their tech-enabled platform.
New players are also entering the fray. Tribeca Developers recently launched 'Tribeca Estates', a vertical dedicated to premium plotted developments and branded villas, aiming to leverage the emotional appeal of land ownership.
This collective movement underscores a fundamental change. Tier 2 and 3 cities are no longer peripheral markets but have become inalienable components of India's real estate growth story, successfully challenging the historical metro-centric model and opening a new frontier for developers and investors alike.
