By AI Powered PMC Akbar Jiwani, Special Correspondent: Real Estate for Realnewsofindia.com
Tier-II Cities Fuel India’s Land-Buying Boom: Transactions Surge 132x as Developers Chase ₹16.67 Lakh Crore Revenue Opportunity
Mumbai, September 11, 2026: India’s land-buying market has entered a new phase of growth, with fresh data from global property consultancy Cushman & Wakefield showing that annual land transactions in the country’s smaller Tier-II cities have exploded 132-fold over the past five years — outpacing the traditional metro markets and signalling a structural shift in where developers see the next wave of opportunity.
According to the report, which tracked 892 land deals across 33 cities between 2021 and the first quarter of 2026, India recorded a cumulative 18,158 acres of land transactions over the period. Annual volumes rose from just 813 acres in 2021 to 6,181 acres in 2025 — a compound annual growth rate of roughly 66 per cent — with another 1,194 acres already changing hands in Q1 2026 alone. Cushman & Wakefield estimates the land parcels transacted so far carry a potential revenue opportunity of ₹16.67 lakh crore, translating into roughly 1.4 billion square feet of future built-up development.
Smaller cities lead the charge
The standout finding is the rise of Tier-II markets such as Coimbatore, Indore, Visakhapatnam, Ludhiana, Panipat and Nagpur. In 2021, these cities accounted for barely 16 acres of annual land transactions — about 2 per cent of the national total. By 2025, that figure had jumped to 2,120 acres, or 34 per cent of all transactions nationally. The average deal size in Tier-II cities also grew sharply, from 8 acres in 2021 to 53 acres in 2025, even as the average Tier-I deal size shrank from 21 acres to 10 acres over the same period, reflecting land scarcity and rising prices in the larger metros. Tier-I cities still command the lion’s share of cumulative acreage at 71 per cent, but the trend line is unmistakably tilting toward smaller urban centres.
Where the land is going
Residential development remains the single largest end-use, accounting for 45 per cent of land acquired, with potential built-up area estimated between 559 and 768 million square feet. Industrial and logistics land use has also surged, making up 27 per cent of deals in 2024-25, while office-linked land purchases have grown nearly fivefold — from 76 acres in 2021-22 to 384 acres in 2024-25 — as developers position for a broader commercial recovery. Data centre-linked land acquisition is emerging as a fast-growing new category, with potential built-up area pegged at 113-124 million square feet, while retail remains the smallest segment.
On deal structure, outright purchases continued to dominate at over 60 per cent (10,910 acres), but joint ventures and development agreements are gaining ground fast — rising from just 11 such deals in 2021 to 42 in 2025 — as land prices climb and developers look to share capital risk rather than pay upfront.
Infrastructure push and Make in India driving demand
The report attributes much of the momentum to a combination of expanding infrastructure capital expenditure, employment generation, and manufacturing growth under government initiatives such as Make in India and production-linked incentive (PLI) schemes, alongside rising e-commerce and modern retail demand and improving expressway connectivity into smaller cities.
“Economic growth, infrastructure capex and employment generation are driving the expansion in land transactions,” said Somy Thomas, Executive Managing Director, Capital Markets, Cushman & Wakefield. He cautioned, however, that the rapid price appreciation of recent years may not be sustainable everywhere: “Land prices have reached a critical level in several locations, making it harder to sustain the same rate of appreciation.” On the shift toward partnerships, Thomas added: “Once land prices become high, it is more attractive to partner rather than deploy expensive capital upfront.”
Outlook
Notably, 2025’s transaction volume was 1.6 times the previous peak recorded in 2024, underscoring how quickly the market has accelerated. With institutional debt largely unavailable for raw land purchases, domestic developers continue to dominate deal-making, financing acquisitions through internal accruals, equity and joint-development structures. Going forward, Cushman & Wakefield expects the pace of price appreciation to vary widely by micro-market, hinging on local economic activity and the pace of infrastructure rollout — with India’s expanding network of expressways and industrial corridors likely to keep pulling capital toward Tier-II and even Tier-III destinations in the years ahead.
