Big Pharma Companies buying land in Hyderabad

Companies like Hetero, Aurobindo, Divi’s Lab and Dr Reddy’s have recently purchased acres of land in the city.

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Last Updated on January 15, 2022 by The Health Master

Large pharmaceutical companies are increasingly buying land in Hyderabad as they look to lock up unused capital in real estate.

According to property brokers, residential and commercial land deals to the tune of Rs4,000-5,000 crore have been noted in Hyderabad.

Companies like Hetero, Aurobindo, Divi’s Lab, and Dr. Reddy’s have recently purchased acres of land in the city.

Other firms that hold land banks include Morepen Laboratories and Cipla.

“It is good diversification away from investing in the stock market,” said a senior executive at a brokerage firm.

“A lot of Hyderabad-based firms prefer investing in land more than any other asset class. They prefer to hold the land for 10-20 years to encash it to get 6x returns.”

The Indian pharma industry has shown a double-digit growth of around 15% in 2021, led by the growth of C-19 products in the last one year, as against a single digit growth of 3% shown in 2020, according to Indian pharmaceutical market research company Pharmasofttech AWACS Pvt. Ltd.

The land buying spree has led to a sharp rise in land prices too.

“There is a high demand for agricultural land and the prices have gone up by 40-80% in the last two years, while residential plots in the core areas have seen upwards of 50% price appreciation,” said Vineet Surana, founder of MD Property Solutions.

“Even the government auction has seen interest from pharmaceutical companies.”

The city has also seen big-ticket lease transactions for setting up research and development units for pharmaceutical companies looking to expand their business operations.

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