70% of the Real Estate Projects in Bengaluru are in Joint Venture

Soaring Land Prices Drive Rise of Joint Development Agreements in Bengaluru’s Real Estate Market. Bengaluru’s real estate landscape is experiencing a significant shift towards Joint Development Agreements (JDAs) due to rising land prices. 70% of the Real Estate Projects in Bengaluru are in Joint Venture

Here’s a breakdown of the key factors:

• Market Trend: A report by Meraqi reveals that 70% of Bengaluru’s real estate assets (residential and commercial) are now developed through JDAs.
• Price Surge: Land prices in Bengaluru, along with other major Indian cities, have witnessed a 20-30% increase in the past three years. This surge has driven the shift towards JDAs.
• Outright Sales vs. JDAs: Before 2021, outright land sales were more common. However, JDAs are now preferred due to their cost-effectiveness for both developers and landowners.
• Benefits of JDAs:
  • Landowners: Monetize land while retaining ownership.
  • Developers: Access prime locations without massive upfront costs.
• Market Sentiment: Positive market sentiment in Bengaluru is leading many landowners to opt for JDAs for residential and commercial projects.
• Increased Returns: JDAs are expected to yield 2-2.5 times higher returns than outright sales.
• Past Challenges (2015-2020): Regulatory changes like RERA and GST implementation introduced initial uncertainties regarding tax, legal, and regulatory aspects of JDAs.

Reasons Behind Rising Land Prices:

• Growth Drivers: Bengaluru’s thriving IT sector with numerous startups, coupled with ongoing infrastructure development, is fueling real estate growth.

Overall Significance:

JDAs are becoming a crucial tool for mitigating the impact of rising land prices in Bengaluru. They offer a win-win situation for both landowners and developers, facilitating profitable development while ensuring land ownership rights remain intact.