Land acquisition money-spinner for realtors
Real Estate companies are making a killing even in the land acquisition process. As they announce plans of setting up projects in a particular area and start buying real estate, land prices in and around that area normally shoot up in anticipation of the development.
This usually leads to a huge difference in the price at which the developer buys the first acre and the last acre. However, as his average land acquisition price is much less than the final market price, he makes a substantial notional profit.
Consider this. A well-known developer recently acquired about 100 acres in Delhi’s Najafgarh area. Initially, the company paid Rs 25 lakh per acre and, but the last deal materialised at Rs 1.25 crore. Despite escalating land cost, the company was able to complete the acquisition for about Rs 40 crore, whereas the land is valued close to Rs 125 crore.
Source: economictimes.indiatimes.com
This usually leads to a huge difference in the price at which the developer buys the first acre and the last acre. However, as his average land acquisition price is much less than the final market price, he makes a substantial notional profit.
Consider this. A well-known developer recently acquired about 100 acres in Delhi’s Najafgarh area. Initially, the company paid Rs 25 lakh per acre and, but the last deal materialised at Rs 1.25 crore. Despite escalating land cost, the company was able to complete the acquisition for about Rs 40 crore, whereas the land is valued close to Rs 125 crore.
Source: economictimes.indiatimes.com
posted by Real Estate India at
3:23 AM
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