Gujarat real estate 2016: at a glance
Words: Nirav Kothary, Head – Gujarat Operations & National Director – Industrial Services, JLL India
The state of Gujarat is one of the most industrialised states in India, with a well-earned reputation of being very investor-friendly. The state has a proven track record for attracting high volumes of investment, becoming the most favoured investment destination in India on the back of its sound economic policies and pro-active governance. The Vibrant Gujarat Summit has acted as an effective catalyst for Gujarat’s journey of industry growth, and the 6th edition of Vibrant Gujarat in 2015 saw as many as 21,304 Investment Intentions signed.
The Gujarat Government is developing the only IFC (International Finance Centre) in Gujarat – GIFT City (Gujarat International Finance Tec-City) is an under-construction central business district to be built on 886 acres of land. Additionally, Dholera SIR, the Gujarat affordable housing mission, the Kalpsar Project, PCPIR, DMIC, DFC, High-Speed Rail Corridor and various other mass transit projects across the cities are initiatives to boost the growth of Gujarat’s urban and industrial sectors.
Gujarat is home to various cities such as Ahmedabad, Vadodara, Surat, Rajkot, Jamnagar, Vapi, etc. which are nodes of urban development in the state, are considered independent growth centres with their own identities, and attract population from across the country.
Ahmedabad, the seventh-largest metropolis of India, is Gujarat’s pharmaceutical and textile hub. Many infrastructure projects like Sabarmati Riverfront, Bus Rapid Transit System and the Ahmedabad–Gandhinagar metro – underway or already operational – will eventually boost the realty sector of Ahmedabad.
Major residential projects are coming up in the western part of the city, in areas like Vastrapur, Satellite, Prahladnagar, Bopal, Vaishnodevi and Bodakdev. Other areas of the city have also witnessed significant residential supply over the last few years. The upcoming and most active areas are Bopal, Prahladnagar, Vaishnodevi, Raysen (Gandhinagar) and Ambli Road, which have quality residential supply of various unit configuration. The price range of the inventory is INR 3000 to INR 8000 per sq.ft.
The major supply of good quality commercial real estate is in the central as well as western region. SG Highway, Ashram Road, CG Road, Sindhu Bhavan Road and Corporate Road have witnessed large commercial projects offering strata sale options. The capital rate for commercial estate ranges between INR 5,500-7,500 per sq. ft., while the rentals vary from INR 35 -55 per sq. ft. The major occupiers are financial institutions, corporate and service sector offices.
The more significant supply of high street as well as organised retail spaces is concentrated in the western part of the city. CG Road, Ashram Road, SG Highway and Prahladnagar are the dominant high street retail locations, while malls are located in the Vastrapur, SG Highway and Satellite areas. The capital rates for retail spaces ranges between INR 12,000-22,000 per sq. ft., while the rentals vary from INR 80 -150 per sq. ft
A large number of industries related to textiles, chemicals, machinery, metal products, pharmaceutical, engineering, plastics, electrical appliances, electronics, passenger cars, etc. are located in the district. Well-developed infrastructure, a prudent industrial policy of the State Government and a peaceful industrial atmosphere have been vital factors to contribute to the industrial growth in the district.
Sarkhej-Sanand Road, Bavla–Changoder, Kadi-Kalol, Vatwa, Narol and Chatral are industrial centres of Ahmedabad which have witnessed major growth post 2001 due to favourable industrial policies. Many large multi-national industries have established their plants in these locations.
Apart from growing business sector and rapid industrialization, there are other growth drivers such as GIFT city, the Delhi-Mumbai Industrial Corridor (DMIC), the new affordable housing policy, newly-revised DCR with enhanced FSI, the Ahmedabad–Gandhinagar Metro and Transit-oriented Development (the successfully-running BRT and upcoming Metro Rail Project). These projects will significantly impact the real estate market of the city.
The third-largest city of Gujarat state has the advantage of strategic location in terms of connectivity with Ahmedabad and Mumbai, and being the geographical centre of the state. The prominent corridors are Old Padra Road, Gotri Road, Waghodia Road and Ajwa Road. Development on the north and south sides is restricted due to the presence of industrial areas.
The established residential areas in city – Alkapuri, Fatehgunj, Gotri, Gorwa, etc. – are mostly centrally located. Upcoming areas include Gotri-Sewasi, Old Padra Road and Ajwa Road. The capital rate for residential apartments in the established areas ranges between INR 2,100-2.900 per sq.ft., and higher for luxury developments.
Vadodara’s commercial sector comprises of offices of financial institutions, academic institutes and branch offices of different enterprises. There are few existing commercial complexes and relevant supply is limited as of date. Most commercial developments are on RC Dutt Road, Old Padra Road, Gotri Road, etc.The capital rate for commercial spaces ranges between INR 2,500-5,000 per sq. ft. Occupiers are manufacturing companies having branch offices, financial institutions etc.
R C Dutt Road, Race Course Road, Gorwa and Old Padra Road have emerged as the prime retail areas of the city. A majority of national and international brands operational in the city are primarily located in these regions. The capital rate for retail spaces ranges between INR 8,000-12,000 per sq. ft. for high street retail.
Vadodara has been driven by industrial developments, especially in sectors like engineering machine tools, cotton textiles, glass, pharmaceuticals, chemicals, petrochemical and fertilizer industries. Major industries are located in north, south and eastern parts of the city. In areas like Manjalpur, Makarpura and Waghodia, Vadodara also has also been attaining growing importance in the knowledge and service based industries like IT/ITeS and biotechnology.
Various industrial initiatives and its strategic location on the Ahmedabad-Mumbai corridor are major growth drivers for the city. Apart from these, the provision of NISG (Nodes to Induce Specific Growth) in the development plan, BRTS and industrial development of eastern part (mainly on NH8) can be considered as future growth drivers of the city.
Surat is distinctly divided into two parts by the River Tapi. The eastern part of city is large in area and has traditional settlements which comprise of the railway station, the old city and textile and diamond industries. The western side of river is emerging, and major real estate developments are happening in areas like Vesu Road, Pal Road and Dumas Road.
The established residential areas of the city are Adajan, Ghod Dod Road, Dumas Road, Varacha, Udhna Road, etc. The real estate market of the city has witnessed considerable activity in the past few years. Prime residential areas in the city are Athwa Lines, Ghod Dod Road, Dumas Road and Adajan. The emerging / developing residential areas in the city are Vesu, Puna-Kumbharia, Ved Gam and Bhathar.The capital rate for residential apartments ranges between INR 4,000-8,000 per sq. ft.
Varacha Road, Parle Point and Athwalines have a good concentration of commercial establishments. This micro-market houses the textile market of the city, along with tenants from the BFSI sector, business professionals and corporate groups. The upcoming secondary business district is the Piplod–Dumas Road area. With the growing urbanization of the city, its commercial presence is expanding to this corridor.
Adajan, across the river Tapi, is also emerging as a commercial hub with new commercial developments coming up. This area is expected to develop further when the proposed new bridge connecting the Pal Hajira Road to Dumas Road is complete. The capital rate for commercial spaces ranges between INR 4,500–8,000 per sq. ft.
The established retail areas in Surat are Athwalines, City Light Road, Adajan and Dumas Road, where major high-street and retail malls are located. The capital rate for retail spaces ranges between INR 9,000 – 25,000 per sq. ft.
Surat’s economy consists of textile manufacturing, trade, diamond cutting and polishing industries, intricate zari works, chemical industries and the petrochemical and natural gas-based industries. The Hazira Industrial area and port is situated in the western side of the city, within the Surat Metropolitan Region. The establishment of large industrial giants in the Hazira Industrial Complex has changed the industrial scenario in the region.
Surat houses established diamond and textile industries which will continue to add to the growth of the city. Additionally, DREAM city (Diamond Research and Mercantile city) on Khajod Road, its strategic location in vicinity to Mumbai, BRTS, the Tapi Riverfront project, the proposed mega tourism project near Suvali, the container terminal proposed near Hazira and the fact that Surat is now part of the Government’s 100 Smart Cities program will be future growth drivers of the city.
Kalavad Road, Jamnagar Road and the 150ft Ring Road are the upcoming destinations for residential development in Rajkot. The city features residential apartments priced in a wide range, from as low as INR 2,500 per sq ft to as high as INR 9,500 per sq ft in quality products which include centralized air conditioning and high-grade flooring and fixtures.
The major commercial as well as retail areas of Rajkot are Yagnik Road, Kalawad Road and Race Course Road. The outright sale price of commercial spaces varies between INR 3,500-6,500 per sq. ft. and for retail spaces, the range is INR 10,000-14,000 per sq. ft.
Manufacturing is the city’s major industry, with most activities concentrated in the two main industrial estates at Aji and Bhaktinagar. In the past, Rajkot’s economy concentrated around the establishment of cloth mills, while the current trend of industrial growth is towards the engineering and auto ancillary sectors.
Apart from automobile and ancillary industrial development, various infrastructure initiatives such as BRTS, the newly-revised DCR, the fact that Rajkot is the activity center of entire Saurashtra region and its proximity of smaller towns, which are future growth drivers of the region.