Ahmedabad Property

As the commercial capital of Gujarat, Ahmedabad rose like a phoenix with renewed vigour and enthusiasm to catch up with the lost time in natural calamities. The earthquake may have caused irreparable damage to the physical assets but not slackened the entrepreneurial spirit of Gujaratis who have several success stories to their credit abroad. With the liberalisation of FDI in real estate, a number of foreign companies and a consortium of NRIs are planning to make large scale investment in real estate development Ahmedabad. There is a reasonably good demand from residents and NRIs for all categories of properties.

The declaration of Ahmedabad as a mega city has given a virtual boost to the realtors where the Centre will invest Rs 5,500 crore to cover seven mega cities across the country. There is a new found initiative sweeping across the market enormously aided by a new breed of entrepreneurs, improved level of transparency in property transactions and building technology. The private-public initiative has been working well with the AUDA’s yeoman drive to improve infrastructure development receiving encomiums from all sections of the society. “The Gujarat Institute of Housing and Estate Developers is keen to promote Ahmedabad as an ideal destination for investment”, feels Jaxay Shah, President of the association. The potential is huge and we are confident that we can play a positive role to the development of the city, he added.

A significant development is that the Centre has recently cleared proposals for nine special economic zones (SEZs) that would be spread all across the industrial landscape of the state. They are Reliance’s SEZ near Jamnagar, Mundra SEZ of the Adanis, Dahej SEZ, a biopharma park on the outskirts of Ahmedabad, two apparel parks, a gems and jewellery park near Surat, an SEZ at Hazira and a special zone for manufacturing electronic items in Gandhinagar.

Unlike other cities, horizontal development has become the order of the day in post-earthquake Ahmedabad. Urban development byelaws have been made stringent with a thrust on height restriction for approval. “The perception of homebuyers has drastically changed today. They are prepared to drive 10 minutes away from the city rather than going 10 floors above”, feels Bhavin Mehta, Head, Business Development, Ganesh Housing Corporation Ltd. However, high-rises still continue but with earthquake proof structures and stringent norms prescribed by the development authorities.

The impact of earthquake is that in areas like CG road there is resistance to buy apartments in pre-earthquake buildings. On Satellite road, there is no supply problem and in fact there is a heavy demand for new buildings under various stages of implementation. Areas undergoing real estate development include Bopal, Thatlej, Sola, Bodakdev, SG highway and Gopa.

The 146-km outer ring road has connected 300 villages to Ahmedabad in a span of just 1-1/2 years. A significant development is that there was neither legal dispute nor any hurdle to the development. It is said that the present chairman of AUDA, Surendra Patel has played a pivotal role in the urban development with effective interaction among all groups. It is also said that the union territory Delhi is emulating the town-planning model from Ahmedabad.

The Sabarmati river front development (SRFD) is expected to give the much needed facelift to the city. Aimed at improving the environment, infrastructure development, public amenities and land development, the project proposes to take up the embankments on both sides of the Sabarmati river along the entire 20.4 km stretch from Narmada canal to Vasna barrage.

Prices:

Land prices in and around Ahmedabad doubled in the past 2-3 years where wide roads have facilitated the movement and in select areas trebled with demand exceeding supply. Residential properties are quoted in the price range of Rs 800 to Rs 1800 per sq ft which are well below the average prices prevailing in metros. “Villas are in good demand and with the requisite infrastructure, investors are bound to get a lucrative yield in the long term”, feels Arvind Shah, director, marketing, Agarwal Estate Organisers Ltd. In the opinion of Devang Shah, managing director, Navratna Constructions, demand for residential property is more from residents. Property developers also feel that there is pressure on their margin due to rigid urban planning rules.

Commercial property development is visible in areas like CG road, SG road, Ambavadi and Navrangpura. The capital value for office ranges from Rs 1200 to Rs 4000 per sq ft and for retailing from Rs 5,000 to Rs 10,000 per sq ft. The yield on investment ranges from 10 to 13 per cent for office and 12-14 per cent for retailing. “The city has the inherent potential to develop varied projects both end users and investors in real estate development”, feels veteran Pavan Bakeri of the Bakeri group.

Retailing:
Retailing is on the upswing with the highest number of multiplexes in the country located in Ahmedabad. Encouraged by the huge footfalls in one of the multiplexes, McDonald is planning to open eight more outlets this year besides Shoppers Stop planning an entry. According to market sources, 2-3 malls are in the pipeline with 5-7 lakh sq ft. A number of international brands are keen to enter the city. “Leased properties are in demand and luring investors with a lucrative yield on investment, feels Jayesh Kotah of JP Construction, which is building ISKON mall on SG highway.

The population of Ahmedabad is estimated to reach 10 million by 2025. The city has more than 80 per cent of the urban population and home to several large corporates and state and district level public offices. According to a recent survey conducted by RK Swamy – BBDO (A Guide to Urban Markets in India), Ahmedabad has the seventh highest Market Potential Value (MPV) among all the 784 cities in India. The total market potential value of the city is 220.63, which is indexed with Greater Mumbai as 1000, the city with the maximum market potential. Ahmedabad is the only ‘AA’ graded city of Gujarat having 30.97 per cent share of total MPV of the state of Gujarat.