By Pankaj Anup Toppo, Vice President – Research, Knight Frank India
“The recent past has not been too generous towards Gujarat. The present moment and the future is however, the time for Gujarat to move forward and Ahmedabad will lead that march,” quipped one of the leading developers of Ahmedabad. Some may dismiss these all claims as the voice of a passionate citizen of Ahmedabad but one cannot deny the fact in the recent past Ahmedabad has emerged as one of the major urban centres to have received undivided attention when it comes to urban development. All this to a great extent has helped in the rapid growth of real estate in the commercial capital of Gujarat. What makes the real estate growth in the city more special is that it is not fuelled by the IT industry but by industries like pharmaceuticals, financial services, textiles and of late, automobiles. The industrial push that Ahmedabad has witnessed has however, run into a minor niggle and we hope that those issues will soon be ironed out before it starts to affect the real estate in the city. There is however, a bright spark for the real estate sector in Ahmedabad.
THE GIFT DREAM
The Gujarat Finance Tec-City, more commonly known as GIFT City, is India’s first global financial services and IT hub coming up near the Ahmedabad airport. This dream project coming up in the north of Ahmedabad has run in trouble over height of some of its buildings and may need to trim down the height of some of them. A study done by the International Civil Aviation Organisation recommended heights ranging from 74 metres and 191 metres for 52 high rises in GIFT City against requests for heights from 68 metres to 474 metres. A committee of the aviation ministry has also approved the findings of this six-month study. The need to trim down the height of some of the buildings in GIFT City comes as curbs on high rises need to be maintained near airports in the interests of aviation safety. We still await clarity on the matter and hope that this issue will get resolved soon, as it is one of the pet projects of Prime Minister Narendra Modi. Scaling down the size of GIFT City will however, dent the image of this international financial hub as was envisioned. If that happens then the real estate sector will have to bear the brunt as not only within GIFT City but also in Ahmedabad. While the issue affecting GIFT is a technical one, the flourishing real estate sector in west Ahmedabad may start feeling the heat for a very different reason.
The automobile industry is one of the major drivers of real estate in Ahmedabad, especially in a western part of the city. The Sanand-Viramgam-Hansalpur belt has emerged as a major auto hub in the western periphery of Ahmedabad. The drive through this automobile belt is dotted with dozens of companies manufacturing auto components and restaurants serving Japanese cuisine. “They even have menu cards printed in Japanese language,” stated one of the developers. While the growth of the automobile industry in this belt has opened up a plethora of jobs— but not for the local population—which is their major grouse. It is largely the migrant population that has benefitted from the boom in the automobile industry in this belt. In the recent past many protests have been organized by the local population demanding to be included in the automobile boom that the region is undergoing. This issue also made headlines during the campaigns in the recently concluded Gujarat elections. The state has no doubt taken great strides in attracting automobile giants to this stretch, it now needs to walk the extra mile to ensure that this niggle gets resolved before it gets out of control.
GEARED UP FOR RERA
For a state that is so efficiently managed, we believe that the above-mentioned issues should get settled soon. This efficient management has thrown up a bright spark for the real estate sector, in an otherwise dull period. Apart from Maharashtra and Madhya Pradesh, Gujarat has been the front-runner in putting in place systems and processes for the smooth implementation of the Real Estate (Regulation and Development) Act, 2016 in the state. The hard work put in by the state in this department is evident from the fact that till end November around 800 projects and 300 real estate agents were registered with the state authority. Most developers did speak about the teething problems that they faced in getting their projects registered. They did take time to understand the details of the rules but are happy that this new system will benefit the now sector in the long run.
While the sector took time to understand the policy measures introduced in 2017, and Ahmedabad was no different, most stakeholders in the city are of the view that the future of the real estate sector in Ahmedabad is going to be bright. The necessary systems and processes are there in place and the fundamentals of the market are sound so there should be no looking back. What makes the deal sweet and attractive for Ahmedabad is that compared to other urban markets it offers a plethora of real estate options and that too at very competitive rates. As regards the minor niggles that have cropped up, we believe should get solved before they make any serious dent on the flourishing real estate sector in the city.