WHY GUJARAT REAL ESTATE MARKET IS HOT

BY Realty Plus

Robust economic recovery post covid, growth and the conducive business policies of the Gujarat government are likely to establish Gujarat as a preferred destination for domestic and global investments in industrial, logistics and data parks to manufacturing and real estate sectors. The state budget introduced last month too has laid emphasis on connectivity infrastructure which will further boost the real estate, though it failed to address the long standing demands of the sector of revision of GST, single window clearances and controlling raw material price hike.

Gujarat cities continue to offer most affordable housing options and also offers luxury residential projects with good infrastructure and amenities around, thus making it an attractive market for the NRIs. In addition the strategic location of the state being a port city, and industrial hub and its close proximity to financial capital of the country Mumbai, makes it an ideal location for commercial developments.

CITIES DEVELOPMENT ON FAST TRACK

Keeping the development of Gujarat's cities on fast track, the state government in January this year had finalized six town planning schemes. These included two final and one preliminary schemes under AUDA in Ahmedabad, one preliminary and one final scheme under Surat Municipal Corporation and one draft town planning scheme of Vadodara Urban Development Authority.

TDRs issued in Ahmedabad are meant for the purposes of slum rehabilitation, heritage conservation and public housing redevelopment projects. For the development of trunk infrastructure, another concept of land pooling is successfully used.

RERA and Adhia committee had earlier recommended key changes in the current town planning regime such as removal of agriculture zoning from municipal corporation limits in development plans so that more space could be made available for residential purposes, shifting of polluting industries out of congested areas and developi ng

an exchange mechanism for transferable development rights (TDR) equal to the prevailing `jantri’ rates for facilitating in cities with dense slums.

Other recommendations were, converting industrial zoning in cities to nonindustrial zones and encouraging mixed developments to reduce road congestion, decrease pollution and to boost economic activities post pandemic.

In the revised DP2021, overlay zones aim to steer urban expansion and population density by utilizing Transit Oriented Development (TOD) strategies, a central business district, and affordable housing zones. In these zones higher FSI has been proposed, and FSI-related incentives are also suggested. Furthermore, Gujarat Budget 2022 has made total provision of Rs 14,297 crore for urban development and assistance for 55 thousand new houses.

In terms of connectivity, like most of the other Indian cities, urban public transportation in Gujarat’s cities, is limited and is an outcome of last minute addition in city planning. The state government to increase efficient connectivity is now focusing on planning and implementation of ‘Integrated Public Transport System’ (IPTS), Bus Rapid Transit System, Metro Rail System, Regional Rail System and up-gradation of municipal bus service for four major cities of Gujarat- Ahmedabad, Surat, Rajkot and Vadodara.

All these developments augur well for the realty market of main urban centres. The large-scale infrastructure and town planning developments have enhanced the real estate value of emerging areas and is set to expand the realty market of the state.

GUJARAT POPULAR MICROMARKET'S TRENDS

Ahmedabad - The commercial capital of Gujarat, Ahmedabad enjoys excellent connectivity to the rest of the state. It serves as the gateway to the rest of the state. Sardar Patel Outer Ring Road, Metro Rail Project and addition of new town planning schemes are creating a vibrant residential and commercial real estate in the city. Another boost has been the Ahmedabad Municipal Corporation announcing a rebate of 25 percent on property tax for residential properties with carpet areas between 40 and 70 sq m. For newly added areas to AMC limits, discounts offered in the first, second and third years will be 75, 50 and 25 percent, respectively.

The residential sales in Ahmedabad grew steadily throughout FY 2021-22. However, the west and north zones clocked the highest sales in the studied quarter. While affordable properties remained popular, a section of buyers shifted to luxury properties, too.

Vadodara – Vadodara is Gujarat’s third largest city and another preferred investment destinations in Gujarat. It is seeing investment coming in from NRIs and investors from across the country. Its easy connectivity with rest of the state and proximity to Mumbai, makes it a great choice for corporations looking to set up a second office. Vadodara is part of the Smart City plan and has a booming IT/ITeS sector which is driving the demand for affordable housing units in the city. The real-estate experts predict a huge increase in rental yields in the city, in the next few years and the property market in the city is showing an upward trend.

Surat - Surat till now known for diamonds and textiles industries is now a modern metropolis with thriving small, medium, and large scale industries. Surat Navsari Industrial area is a prime choice for global investors and the city is also gaining traction among NRIs. There is also an unrelenting demand for affordable housing, though the prices remained stagnant last year.

The east, north, and south-east parts of Surat have witnessed the most rapid residential development over the years due to the presence of good social infrastructure, connectivity, and employment opportunities. However, the southwest and western parts of Surat are still in the nascent stages.

Gandhinagar - In cities like Ahmedabad and Gandhinagar, Covid-19 shocks failed to hit housing prices, according to the Economic Survey 2022. Housing prices have continued to increase in these cities despite the pandemic. With increase in investments into GIFT City, Gandhinagar is emerging as one of the fast-growing hubs for residential and commercial real estate. After Ahmedabad and Vadodara, it is the third major city clocking yearly growth in new project launches, according to GujRera platform.

Rajkot - Due to the presence of sectors such as jewellery, textiles, watches parts among others, Rajkot has excellent infrastructure and connectivity development under the Rajkot Urban Development Authority (RUDA). Many affordable residential projects are coming up in Rajkot and the upcoming hospitality, retail and business houses have helped to maintain the demand.

Halol - Halol is the latest addition as the real-estate investment hubs in Gujarat. Apart from the presence of Champaner Pavagadh Archaeological Park giving it a huge tourism potential, it is part of the ambitious DMIC corridor and is an industrial hub. The government of Gujarat has also proposed the development of Special Economic Zones in the city. Halol is witnessing a huge demand for affordable housing and commercial and retail centre,

GIFT City - After commercial, even residential real estate investments have picked up pace in GIFT City – India’s first international financial services centre (IFSC) in Gandhinagar. Some 55 lakh square feet residential real estate space is coming up in the campus with an investment of Rs 2,700 crore over the next five years.

Several global and domestic companies have started operations in GIFT City with more on cards. This has propelled demand for residential units here, and meeting this demand, developers are coming up with projects in line with walk-to-work concept. This will be a catalyst in accelerating growth of the real estate sector in and around Gandhinagar.

Prominent Ahmedabad-based developers are eyeing GIFT special economic zone (SEZ) and non-SEZ region for investments. For instance, Savvy Infrastructure plans to invest at least Rs 1,000 crore. Ahmedabad-based Nila Spaces too will invest Rs 300 crore for a residential project and Shivalik Group is also launching a project in the campus.

INFRASTRUCTURE ON THE MOVE

Some notable developments in the state that boost real-estate include the DMIC (Delhi-Mumbai Industrial Corridor), metro rail linking Gandhinagar and Ahmedabad, PCPIR (Dahej Petrochemical & Petroleum Investment Region), BRTS (Bus Rapid Transportation System) for four cities in the state – Vadodara, Surat, Rajkot, and Ahmedabad.

The state government budget this year has provision of Metrorail and Metrolite services in Municipalities and Provision for infrastructural facilities to Ahmedabad, Surat, Rajkot, Vadodara and Gandhinagar Municipal Corporations and Dahod Municipalities under Smart City Scheme.

In addition, Group Captive Solar and Wind Energy Park will be set up at a cost of `200 crore to make the municipalities self-reliant in the energy sector by getting 150 MW of electricity from non-conventional sources for street lights, water works and suez work. Also approved are Ahmedabad Municipal Corporation’s infrastructure project under World Bank Assisted Gujarat Resilient City Development Program and World Bank-assisted Tapi river bank development in Surat.

Gujarat’s six cities including Ahmedabad, Rajkot, Surat, Vadodara, Gandhinagar and Dahod were selected under the National Smart City Mission. Of the 337 projects planned for these six cities, 209 were completed by the end of 2021.

Most of the projects aimed at making the six cities smarter, are related to information and communications technology (ICT) and water infrastructure. According to the officials, the idea is to make the six smart cities in the state slum-free. An automated land encroachment prevention system is also being developed.

Gujarat, being strategically situated on the west coast of the country, has emerged as one of the fastest growing industrial states. As many as seven new industrial estates spread over 1,911 ha will come up in Gujarat. The state government also plans to provide incentives to promote industries and research and development. Five new agro parks and seafood parks each will also be established.

Seven new GIDC estates are proposed in Ode-Anand, Khandivav-Balasinor, Morbi, Madhiya-Bhavnagar, Dahej-SEZ, Bharuch, bulk Drug Park in Jambusar and Dhrol- Jamnagar.

Gujarat’s new IT/ITES Policy 2022-27 seeks to support data center projects through a onetime incentive of 25% of capex subject to a INR 150 crore ceiling and power tariff subsidy for five years.

Dholera Special Investment developing in an area of 30 sq km is first Greenfield industrial smart city in India. It is the largest Greenfield industrial investment region and the Airport Authority of India is working on the Dholera International Airport.

ACCORDING TO DATA FROM THE GUJARAT REAL ESTATE REGULATORY AUTHORITY (GRERA), NEW COMMERCIAL PROJECT REGISTRATIONS IN GUJARAT ROSE BY 24% TO 213 IN 2021-22, AGAINST 171 IN 2020-21. INVESTMENTS WORTH RS 5,005 CRORE HAVE TAKEN PLACE IN NEW COMMERCIAL REAL ESTATE PROJECTS ACROSS GUJARAT IN 2021-22, UP 13% FROM RS 4,436 CRORE IN 2020-21.

GUJARAT HAS COMPLETED 62% OF ITS PROJECTS IN SIX CITIES, HAVING SPENT 35% OF THE MONEY SO FAR, WITH THE STATE GOVERNMENT AIMING TO EXECUTE ALL PROJECTS BY JUNE 2023 DEADLINE.

Tags : Ahmedabad Rajkot Surat Vadodara Gandhinagar Dahod Gujarat real estate slum rehabilitation heritage conservation public housing redevelopment projects Dholera Special Investment National Smart City Mission World Bank Assisted Gujarat Resilient City Development Program