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Despite rapid inflation and increased construction costs, Gujarat’s estate market continues to grow at an impressive rate, with prices appreciating faster than inflation. Building infrastructure will be crucial in the coming years alongside the existing focus on auto, semiconductors, engineering and pharma industries in the state.
Infrastructure Boom & Real Estate
Gujarat is fortunate to have strong infrastructure support from the government. However, land aggregation, conversion, zoning, and acquisition are key issues. Paresh Sharma, Former Chief Town Planner Government Of Gujarat, added, “The synergy between logistics, manufacturing, and infrastructure drives real estate development for the state. Though financing is a major issue, we need to address how infrastructure is delivered. Currently, planning and development are managed by the same entities without clear accountability. We must reimagine our outdated municipal governance. As major cities like Ahmedabad and Surat expand, smaller cities will face similar development challenges in the next 15-20 years. It's vital to tackle infrastructure issues in both large and small towns. Beyond municipal limits, developing peripheral areas presents significant problems. To mitigate this, increased densification is essential to reduce travel distances, particularly to these outlying areas.”
Atman Desai, Partner, Infrastructure and Project, Khaitan & Co, stated, “Despite the hurdles, Gujarat excels with initiatives like Sanand, Gift City, and Dholera, providing developers with excellent access to power and resources. The state thrives in sectors such as semiconductors, data centers, logistics, hospitality, and renewable energy and government’s focus on creating congenial business ecosystems will help Gujarat stay ahead. I believe, government should serve as a facilitator for the public and private sector partnership in infrastructure development across the state.”
Parth Patel, Managing Director, Kavisha Group, added that as small towns grow into megacities or metropolises, infrastructure like transportation systems play a crucial role. Efficient transportation, including BRTs, metros, and well-built highways, caters to all real estate demands from residential to manufacturing. Additionally, facilities like airports and railway stations drive city growth by ensuring connectivity. For example, in Gujarat cities, TP schemes have been pivotal, allowing for swift travel— reaching any city centre within 40-45 minutes. Cities like Bangalore and Delhi, lacking such schemes, face stunted growth and long commutes.”
Sameer Sinha, Founder & MD, Savvy Group expressed,“Gift City sets a new benchmark for infrastructure-led development in India. In India, we often build infrastruc- ture after construction, unlike Gift City, which had infrastructure laid out before any buildings were permitted. Today, Indian developers are eager to compete globally if given the right tools and policies. Achieving India's net-zero targets by 2070 requires immediate policy implementation and sustainable urban development.”
Sharing his perspective Suresh Patel, Director - Gujarat State Road Development Corporation, President NARED- CO – Gujarat, stated, “The government is allocating 65,000 crore rupees annually for highway development and investing heavily in airports, cargo airports, ports and railways. Last year's annual budget for railway develop- ment alone was 1.32 lakh crore rupees. Additionally, the government is contributing to Smart City Development, with projects like the freight corridor, where 37% of the corridor runs through Gujarat, and Metro rail, and the bullet train. With 7,400 national projects underway, we're on the brink of another economic boom. The government collaborates with private sectors on various projects, like Gift City and Dholera to Gujarat town planning. These public-private collaborations are vital in acquiring for infrastructure development.”
Dr. Vatsal Patel, Founder - Setu Infrastructure, and President, Gujarat Institute of Civil Engineers and Ar- chitects (GICEA), said, “The quality of work in Gujarat has significantly improved compared to ten years ago. Developers today are not cutting costs on structural safety and fire precautions due to the strong economy. Public discipline, not system failure, leads to accidents despite safety measures and permissions. We must now prioritize social infrastructure alongside roads, drainage, and other facilities. A resilient city needs spaces like parks and good schools to raise public awareness and discipline. However, even top-notch infrastructure fails if the public misuses it or doesn't maintain it properly. Thus, a well-maintained social infrastructure is essential for instilling proper public discipline and ensuring overall societal well-being.”
Industrial Parks Growth Story
Undoubtedly, the industrial region of Gujarat has firmly positioned itself as a vibrant hub for global trade and export. Rumit Parikh, Director - Occupier Strategy and Solutions Industrial & Logistics and Retail, Knight Frank India Pvt Ltd elaborated, “Gujarat's warehousing market has evolved significantly since 2014, transitioning from traditional godowns to modern grade-A logistics parks in cities like Ahmedabad, Baroda, Surat, and Vapi. The state's industrial growth is impressive, with 49 ports handling 40% of India's cargo and 19 operation- al airports, including four international ones. Gujarat leads the country's exports, contributing a remarkable 33.55%. Acknowledged as a logistics powerhouse by DP, IIT, 's infrastructure is further bolstered by projects like the Delhi-Mumbai Industrial Corridor and the Dholera Expressway. Future developments include 11 new jetties and seven rail connectivity projects, promising even more growth.”
Nirav Kothary, Director, Godwitt Construction Pvt Ltd, stated, “Gujarat has long been a hub for engineering and pharma companies, now attracting the auto sector with Tata Motors leading the charge. Semiconductors are creating buzz in Ahmedabad, adding to the industrial growth. However, improving our cold chain network is crucial as 40-50% of produce goes to waste without it. The government should incentivize efficient farm-to- table cold chain. The current biggest challenge is the high cost of land, construction and the added expenses that push rental prices. However, occupiers don't realize the complexities and costs involved, yet they demand top-notch specifications and ESG compliance.”
Bakir Gandhi, CMD, Crystal Group, concurred, “A grade-A building isn't just about quality construction; it includes infrastructure like parking, parks, and an ecosystem. The main challenges are high rentals and local competition from traditional landowners. Modern companies need quicker operations, which makes prime land and approvals crucial. In regions like Gujarat, developers also face costs for infrastructure like water and roads. Retaining and maintaining these parks is also a big challenge and requires substantial funds or an institution's support. It's also crucial to find the right tenant mix to avoid conflicts, considering compliance is easier in Gujarat. Lastly, acquiring land at a reasonable price is essential.”
Anshul Shah, Director, Ducon Consultants Pvt Ltd, articulated, “Rising and fluctuating raw material prices indirectly impact industrial output optimization. Industries are willing to pay more for comprehensive services in industrial parks to avoid challenges. Designers have prepared numerous master plans for specialized indus- trial parks, focusing on creating flexible designs that minimize the impact of uncontrollable external factors. This approach ensures long-term viability for both de- velopers and end users.”
Kartik Jalan, Founder & CEO, Indicold, responded, “Today, lot of cold storage units are found in Mehsana, Palanpur, and Deesa region, which is in the north of Gujarat, and an industrial park specifically for a cold chain is a sensible idea. Even if buildings are next to each other, different occupiers prefer separate parks. I've experienced this first-hand in Sonipat, Haryana, where sharing a park caused us many issues. Mistakes from one occupier can negatively affect another's audits. Companies consider many subjective factors like staff training and empathy when choosing locations, making it hard to control the environment in a shared space.”
Deciphering Residential Realities
Gujarat has become a key player in India's real estate landscape due to its strong economic growth and industrial boom. As per Ravin Bhojani, A&T Head, Ahmedabad, CBRE India, “Gujarat is experiencing significant growth, particularly in Ahmedabad and cities like Baroda and Rajkot. Ahmedabad has been in the spotlight for the past decade. Still, new project registrations in the state have decreased by 7.7% from 1866 to 1721 this fiscal year, according to the Gujarat Real Estate Regulatory Authority. This trend spans all categories, including residential, commercial, mixed-use developments, and plotting schemes Projects started before the pandemic remain under construction, with only a few completed.”
Paras Pandit, CMD, Sheetal Infrastructure added, “Although Ahmedabad is seeing redevelopment projects surge, it's still in its early stages compared to metro cities like Bangalore or Mumbai. Moreover, developers are facing increased land costs and a 20% rise in con- struction and labour expenses. With rising land prices and construction costs, there are now narrow profit margins in the sector.”
Elaborating on his projections for real estate market in Gujarat, Dhruv Patel, President, CREDAI Ahmedabad GIHED, said, “While there is a slight decline in project launches this year, numbers are still higher compared to pre-pandemic averages. Technology and digitalization are increasingly integrated into construction, with more mechanization and virtual reality for customer engagement. Despite a slower adoption pace, the industry's future looks promising with ongoing advancements in tech and digital tools.”
Kamal Singal, Managing Director & CEO, Arvind SmartSpaces Limited, said, “The real estate demand is now stabilizing at levels 25-30% higher than pre-COVID. Developers are optimistic, and focusing on securing good land and timely clearances. Also, efficient use of technology in sales has reduced costs significantly, with about one-third of our sales coming directly through digital channels. Technology remains a key driver in balancing overall costs despite rising construction expenses.”
Rocky Israni, Managing Director - India Investments,Pacifica Companies was of the view that real estate manufacturing is a lengthy process, with a cycle of 3 to 5 years from land purchase to finished product delivery. This often results in temporary demand-supply mismatches across asset classes. Developers rush into underserved markets, but the time to bring a product to market can create short-term surpluses, leading to perceived slow sales in areas like luxury housing. As the state grows at 15% compared to the country's 8%, there's a high demand for homes. Developers can deliver more homes, but affordability issues are stalling sales.”
Rohan Shah, Co-Founder, Realatte, articulated, “Compared to cities like Bombay and Bangalore, there is a scope for more technology intervention in Gujarat’s real estate. Digital marketing is cost-effective, with sales costs under 2. It’s ROI-driven—you'll know exactly how many inquiries convert to bookings. Increasing inquiries will ultimately increase bookings, showing great potential in the digital space.”
Buoyant Commercial Real Estate
Commerce and Gujarat share an unparalleled relationship, Jigar Mota, Director - Head of Transactions, Cushman & Wakefield – Gujarat, stated, “Gujarat boasts a remarkably sustainable real estate industry across all asset classes. From Ashram Road to SG Highway in Ahmedabad, Old Padra Road in Vadodara, Parlay Point to Vasu in Surat, and Yagnik Road to Ring Road in Rajkot are the bustling commercial real estate hubs. Moreover, despite the predominantly built-to-sell market, Gujarat has attracted giants like Google and IBM to join its booming commercial real estate story. Their presence underscores Gujarat’s dynamic market growth.”
Anmol Patel, Promoter, Ganesh Housing Limited, shared his perspective, “Before 2014, buildings were much shorter, with smaller offices and retail shops. After 2014, we saw a significant shift towards taller buildings with improved amenities and a focus on employee interaction. These newer buildings also boasted bigger offices and retail spaces, enhanced safety standards and dedicated parking areas. This transformation including IT Parks coming up in the city are shaping the commercial real estate of Ahmedabad.”
Himanshu Sharma, Managing Director, Head - Leasing & Business Development, Tishmen & Speyer, added, “I feel, both built-to-sell and built-to-lease models will grow in parallel. Our project in Ahmedabad, set to launch with 75% efficiency, aims to surpass the benchmarks set by cities like Bangalore and Hyderabad by creating a top-tier IT park that sets new industry standards. Developers in Ahmedabad face a pivotal choice: strive for greatness or remain content with current successes. Over the next 4-5 years, the growing demand for quality co-working spaces presents a significant opportunity. Ultimately, the success hinges on delivering superior spaces that meet both Indian and international standards, attracting businesses to establish their offices here.”
Umesh Uttamchandani, Co-Founder and Chief Growth Officer, DevX, agreed, “We have witnessed an astounding 100% year-on-year growth, driven mainly by traditional companies shifting towards co-working spaces in urban hubs like Ahmedabad and PuneThis trend is expected to continue, significantly impacting the commercial real estate market without entirely overtaking traditional leasing. Traditional developers should embrace this trend by including dedicated co-working spaces in grade-A buildings.”
Yash Shah, Founder & Director, The Address expressed,“Currently, coworking spaces make up roughly 28% of buildings in both tier-one and tier-two cities, a figure that's expected to soar to 60-65% by 2030. Boasting an annual growth rate of around 17%, with potential spikes up to 40%, this trend highlights how developers are increasingly focusing on providing tailor-made solutions for coworking companies to quickly fill their spaces. This thriving industry showcases the future trajectory of office environments.”
Viren Mehta, Founder & CEO, WiseVision Realty Pvt. Ltd, said, “Firstly, I don't see land as overly expensive. Gujarat's real estate is valued at 5.2 lakh crore with around 39,900 projects, and of these, 14,000 are recent launches with only 2,080 being commercial. Ahmedabad stands out with 4,200 projects and a notable commercial presence at 800, representing roughly 40% of Gujarat's commercial units. Land prices are relatively moderate, even when factoring in construction costs; rental and capital values compared to cities like Mumbai, Delhi, Bangalore, and Hyderabad. As the city expands west- ward from its old CBD areas like Ashram Road and KG Road to S.G. Road, rental increases have been minimal. Though the circle rate may soon be revised, causing a rise in FSI costs and finished product prices, overall land prices in Ahmedabad remain fair compared to other major Indian cities.”
Gift City Real Estate Potential
Located just north of Ahmedabad Gift City, Gujarat International Finance Tec-City, is India's bold step towards becoming a global financial hub. Rutul Shah, Co-Founder & Partner, Aurtus Consulting, added, “We have been working with Gift City for over 15 years and have observed its tremendous growth. This place is set to surpass its current expanse of 3000 acres due to various business incentives and infrastructure developments. With new global concepts being introduced, Gift City is becoming an attractive hub for both residents and non-residents, In next 3-4 years, Gift City will be trans- formed with new iconic structures, featuring retail and leisure complexes that will enrich the entire ecosystem.”
Ravin Bhojani, A&T Head, Ahmedabad, CBRE India, agreed, “The entire ecosystem functions effectively with social infrastructure supported by residential and commercial areas, promoting the global "walk to work" theme. Ahmedabad has emerged as a dynamic city and the first smart city with a centralized infrastructure monitoring system.”
SK Patel, Founder, Kavyaratna Group, added, “Over the past three years, our firm's experience with Gift City's ecosystem has been outstanding. I would like to highlight the city's planning, particularly its allocation of infrastructure space. Residential areas account for just 4% of the total land, while commercial areas, including offices, comprise 28%. A significant 34% of the land is reserved for green development, making this city planning unique. All essential infrastructure was completed before allocating plots for residential and commercial buildings. However, given the minimal 4% residential space, employees in Gift City face long commutes from Ahmedabad or other cities, leading to significant time loss.”
Chitrak Shah, Co-Founder & MD, Shivalik Group, Chairman CREDAI, shared, “Within Gift City, construction costs are high due to the necessity of vertical building. Diverse types of structures like low-rise and high-rise buildings, along with iconic structures, lead to varied construction expenses and saleable prices; the ongoing debate revolves around whether Gift City should generate revenue from real estate or through GST and other incomes.”
Amit Jaitly, Deputy Managing Director, Mid India, Project Management, said, “GIFT City offers a unique and complex ecosystem with extensive infrastructure, including hotels and public utilities that attract visitors. The presence of advanced technology, such as cutting-edge MEP and HVAC systems, sets it apart from typical projects. Iconic skyscrapers are being developed, reminiscent of New York City's skyline and riverfront. However, rapid development is essential, with less reli- ance on government funding, to ensure timely delivery. Besides, the upcoming metro inside GIFT City is crucial for its future growth.”
CREATING A DIFFERENCE
Sharing their take on Gujarat real estate and how they envisage to make a contribution to its growth Neel Thakkar, Managing Director, Dharmadev Infrastructure Pvt Ltd, expressed, “I am fortunate to work in the housing industry, specializing in affordable housing, with units ranging from 15 to 40 lakhs. As an architecture graduate, I understand the challenges and opportunities in this field. Each market and division we work in presents unique problems and opportunities for growth. Developers often focus solely on FSI, while architects seek comprehensive exploration. Understanding both perspectives helps me collaborate effectively with them.”
Sumit Suri, Director-Investments, Altern Capital,stated, “The biggest challenge in Gujarat is the reliance on cash, which hinders funding from IFCs and NBFCs. We have launched an AIF focusing on plotted development and last-mile financing. Our foremost consideration in underwriting, is to assess whether an individual with expertise in a particular geography can achieve success, Inadequate presentation of information to lenders can result in delays and necessitate further discussions to build confidence. Early-stage developers frequently approach lenders who do not fund early stages. Besides, developers tend to seek low-interest rate lenders first, although land-stage funding typically requires Alternative Investment Funds (AIFs) or high- yield institutions due to banking restrictions.”
Tanuj Gupta, Founder & CEO, Big Estate, said, “Over the past decade, and particularly post-Covid, technology has significantly disrupted this sector, impacting various aspects such as construction, supply chains, lead generation, and management. Looking ahead to two to three years, we foresee greater adoption of blockchain and AI technologies to enhance construction techniques and ancillary services like CRM. Considering the emphasis on web 3.0, AI, and block- chain, blockchain's significant role in supply chain management cannot be emphasized enough. I believe, Gujarat realty is ready for a major transformation."
Gujarat's land prices are relatively moderate, even when factoring in construction costs; rental and capital values compared to cities like Mumbai, Delhi, Bangalore, and Hyderabad.
In most cities, the utility infrastructure is developed after buildings come up. Gift City has set a precedence for infrastructure-led development in India.
