Land can best be defined when one mentions real estate in India, one tends to think only of what one can physically witness, such as under-construction houses, offices, malls, or flats. Land, on which all other valuable property is based, is, paradoxically, not often brought up for discussion with any seriousness. It is generally considered a complex, opaque, or even purely speculative zone, making it the least understood market for realty.However, in the next phase of urbanization in India, land is slowly emerging as one of the most valuable realty resources. This is a result of the planning and development of Indian cities.Why land behaves differently from buildingsA core reason land is misunderstood is because land behaves very differently from improvements. Improvements depreciate, require maintenance, are subject to wear and tear, rely on tenants, and are susceptible to design obsolescence and market cycles. Their value is inextricably tied to cash flows and occupancy. Land does not depreciate. Its value is not tied to maintenance or rental income, but location, permitted use, and future relevance. Most importantly, these factors are influenced largely by government policy rather than market sentiment alone. As cities grow outward and upward, land that once sat on the periphery often finds itself central in urban activity. That distinction renders land a fundamentally different wealth-building asset, one that works on longer timelines and structural shifts, rather than quarterly performances.The cities of India are policy drivenUnlike many global cities that grew organically over centuries, Indian cities are largely policy-driven. It is the governments that decide where the cities shall expand, which corridors shall be prioritized, how dense the development can be, and what kinds of activities are allowed in specific zones. These decisions are then put into master plans, zoning regulations, infrastructure blueprints, and long-term strategies that often look 10 to 20 years ahead. When such plans move from paper to execution, land prices are usually the first to react. By the time construction activity becomes visible, a significant portion of land value appreciation has already occurred. An understanding of land is thus inseparable from the understanding of policy in shaping the pattern of growth that identifies the urban.Zoning: The unyielding determinant of land valueOne of the most overlooked aspects of land is zoning. Zoning determines what can legally be built on a piece of land. Agricultural land typically allows limited use and therefore carries lower value. Commercial, hospitality, or mixed-use zoning permits higher economic activity and revenue potential. When land shifts from one category of zoning to another, there is often an immediate increase in value before anything is actually built. That said, such a shift is not a matter of speculation. Instead, it is administrative: the land becomes more usable, more flexible, and far more attractive to developers and institutions solely because regulations have changed. Zoning upgrades are perhaps the most potent triggers of land value re-rating in Indian cities.Understanding FAR and development potentialVery much related to zoning, there is also FAR: Floor Area Ratio, which describes the quantity that can be built on a particular plot. Two plots of equal size, located in the very same place, can be worth much more if one allows higher construction than the other. As cities densify, governments increase FAR along major roads, transit corridors, and urban centers. Such changes directly benefit the landowners by increasing the development potential of their land. This creation of value happens even before a single brick is laid, reinforcing the argument that land benefits primarily from planning decisions.We talked to Dhruv Sarkar at Bharat Wealth Group, who creates strategic intelligence at FAR level for investors and said, “Think of FAR as a rate amplifier of the land. Extra FAR is only available if a land piece meets authority norms like access to a land, width of the road etc. He mentions how in Ayodhya, an investor who put money with them on Banaras connecting road got a 8.75 FAR approved which basically allowed the investor to create and sell 8.75X the area on land thus multiplying the return only basis and approval on increase in FAR document. Simple understanding of FAR and investment grew manifold. That’s the power of FAR.”Infrastructure: The permanent value multiplierTo support infrastructure is yet another important element that changes the economics of land. Roads, airports, metro lines, and Ring Roads can provide connectivity; in addition to this, they change the usage of the land forever. The wider road improves visibility, connectivity, and commercial viability. The presence of transport nodes makes such areas ideal for hotels, offices, logistics parks, and institutional development. Sometimes, width and connectivity are more important than the current surroundings, as infrastructure drives future demand. This is especially evident in the Indian situation, where the development of Gurgaon is illustrative: it began with the Delhi-Gurgaon Expressway, Cyber City, and zone upgrade notifications. The land around Navi Mumbai International Airport saw large appreciation in value after announcements about development plans. The Yamuna Expressway zone saw a resurgence of interest in land after the Jewar Airport project reached the implementation stage.Tourism, faith, and city economicsTourism and faith-driven cities have their pattern similar but different. Places such as Ayodhya, Tirupati, Shirdi, and Ujjain have, over some time, witnessed land appreciation near access roads, temple corridors, parking zones, and hospitality clusters. As footfall grows, the demand for hotels, food services, transport, and logistics creates permanent demand for commercial land. Residential areas benefit too, but commercial and mixed-use land near activity hubs usually tends to be ahead. Once again, land value rises ahead of large-scale construction.The importance of landThe Indian market for agricultural land has come into the spotlight again for three reasons. First, there has been a certain improvement in the master plans that have been laid down by the authorities. Secondly, infrastructure spending by the government is changing the landscape of regional connectivity on a large scale. Third, the rise of other sectors like tourism, services, and institutions has led to demands for commercialized lands. The truth is, in most investment portfolios, real estate is still daunting because it is invisible in terms of monthly income, although it is becoming less daunting because of its complexity in terms of regulations. Often, ignoring real estate means ignoring early indicators of concentrated value in the future.Reading the future of citiesLand does not relate to short-term trading. It relates to playing the game the way urban structures are planned to grow. In a country that will experience the next generation of urbanization mostly through planning rather than accident, land will remain the first and best indication of the eventual real estate value even though it generally stands out as the worst understood. To comprehend land, finally, is to grasp the future of Indian cities as such.
