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What IS Real Estate?

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60 percent of Ahmedabad metro rail funding to come from realty sector

A critical aspect of the Rs 3,400 crore metro rail project is that close to 60% of the funding — between Rs 2,000 crore and Rs 2,500 crore — will come from real estate development along the corridor. The urban development department will plan a policy, which involves special development regulations for areas earmarked within a specific radius of the metro corridor.

The concept called Transit Oriented Development (TOD) means that development within 100 metres and 500 metres to 800 metres around the metro rail may accommodate high-density residential or commercial hubs. These high-density development projects will fuel the metro with people coming to work and living along the corridor.

To make the metro rail project economically viable, a concept of the metro transporting local freight between destinations within the city is also being proposed. A similar system exists in the US. Sources claim that the metro can tap 15-18% of freight movement within the Ahmedabad, which happens on weekdays.

Besides, senior officers at MEGA pointed out that the height of the metro rail elevated corridor would not be as high as they are in Delhi. This has been decided keeping in mind the future need of building multi-level flyovers. In addition, MEGA is planning a broad-gauge network.

Corridor space finalized

“Only two pieces of land remain to be acquired for the project,” an AMC official said. “These are a plot near a CNG pump station in Ranip and a small piece of land near a heritage structure under the Archaeological Survey of India (ASI) in Paldi.” The total metro route will be 32.65 kilometres while the Gandhinagar–Koba circle will be 18 kilometres, he said.

Source: The Times of India, Ahmedabad

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Developers May Increase Gujarat Residential Rates Post Diwali

Home sales are far and few, but a section of Gujarat builders is planning to raise prices by 10% post-Diwali. Real-estate experts however, feel that the move could possibly boomerang in the present market conditions. Rising construction and labour costs are the main reasons for a possible hike being considered by the developers most of whom operate in Ahmedabad and Gandhinagar. “Profit margins of the developers are being heavily dented by the rising costs. Therefore, we may consider a 10-12% rise in prices after Diwali,” Suresh Patel, president of GIHED (Gujarat Institute of Housing and Estate Developers), told ET.

“Of the total home bookings that happen throughout the year, 35% happen between Navratri (September 28 onwards) and Diwali (October 26),” Mr Patel said about the realty market in Gujarat which is worth Rs 60,000 crore. Of this, 40% share belongs to Ahmedabad. When asked if the builders were considering to offer any discounts to buyers who visit GIHED exhibition between September 30 and October 2, Mr Patel said, “There was no mention of discounts in our last meeting. The prices are not expected to go down. There could be an increase after Diwali,” he added. The builders’ body is organising a property show in Ahmedabad that will showcase over 500 projects worth about Rs 12,000 crore. Even the invites for the exhibition carry the phrase “now or never”, cajoling the buyers to go for an immediate buy.

Real-estate experts who did not wish to be named pointed out the possible move considered by GIHED was “irrational” and could back fire. “It is not possible to hike prices. At present there are no buyers in the market. Except for apartments costing Rs 25 lakh and below and some plotted developments, the sales are poor. For instance, the sales of three bedroom-hall-kitchen apartment and bungalows are down by over 60% in Ahmedabad,” the expert said.

Since Diwali, last year, there has been hardly any rise in real-estate prices in Ahmedabad. While prices have remained stagnant for the last several months, the sales have nose-dived. “Real-estate prices are their peak in Ahmedabad. Any further attempt to raise it will dry up whatever little demand remains in the market. However, if a discount of 15% is offered, the lost demand could be revived,” said a developer on conditions of anonymity.

Earlier while addressing a press conference on Monday, Mr Patel seemed to be in a denial mode. “The happenings in the global economy have never touched the property markets in Gujarat. In 2008, during the slowdown, the property markets in Delhi and Bangalore corrected by 12%, while Ahmedabad grew by 8%. This time too we don’t not see any effect on the local markets,” Real-estate experts point out otherwise. During the global slowdown, certain micro-markets in Delhi and Mumbai corrected by a maximum of 40%, while those in Ahmedabad saw a dip between 15-20%.

He also went ahead and compared Ahmedabad with Pune. “While homes costs a maximum of Rs 5,700 per square feet in Ahmedabad, in Pune they cost between Rs 4,200 and Rs 16,000 per square feet,” Mr Patel said. However a glimpse at only the office space market (which is a smaller market compared to residential) in both the cities shows that Pune with a supply of close to 3 lakh square feet of office space in the just the second quarter of calendar year 2011, was three times the size of Ahmedabad.

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What Is Real Estate?

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Ahmedabad enjoying realty boom

Ahmedabad has proved itself to be a supreme place as far as realty development is concerned. In a very short span of time, the city is standing at par with the other metros, while once it was yet considered under the list of under-developing zones.

One of the prime reasons for this is that the city itself possesses an excellent infrastructure with welldeveloped roads, broad flyovers along with all basic amenities of cleanliness, transport and drainage. In recent times, the city has become an investment hub and one of the best things is that the growth in all areas is simultaneous and even.

When all the sectors of the city are developing, even the eastern Ahmedabad is progressing fairly well. The Sabarmati Riverfront project has boosted the growth of the eastern city by all means. This developing area will earn good appreciation value and will make the entire stretch publicly accessible. Due to this, the eastern part of the city will be thriving with new public and private infrastructure, recreational parks and commercial offices. The eastern part of the city especially the Ashram Road now hosts vibrant new spaces for residence, hotel and recreational services and commercial usages.

Ahmedabad has high affluence and several prominent realty players are taking keen interest to invest here. All the areas of the city present excellent prospects for growth. The construction activities and new real estate plans have elevated the property rates in the city. Ahmedabad is looked upon as an ideal location for property investments, with an excellent share in the appreciation value. Areas like CG Road and Law Garden are zooming with new construction activities.

Ahmedabad’s growth curve is even in all directions and with a balanced demand to supply ratio, it is likely to continue for the coming years. Along with the western side like Bodakdev, Satellite and Jodhpur, the old city area is likely to gain popularity in the commercial sector. Commercial property development is surely taking place in areas like new Maninagar, Navrangpura, Naroda and Chandkheda. The strategic location and highend infrastructural amenities have promoted these areas for business and office utilisation.

Needless to say that Ahmedabad is a current rising star in the realty segment. The city is witnessing many new ventures and is serving a decent investment option, for all the areas including the eastern and southern suburbs are booming with realty growth.

Source: The Times of India, Ahmedabad

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Ahmedabad Retail Sector May Witness Growth in 2011

After a lull for almost a year, the Ahmedabad retail market is set to witness some activity in 2011. With the likes of Alpha One city centre and Acropolis Mall set to offer retail space in near future, industry sources estimate an addition of 700,000 square feet of retail space being added in Ahmedabad this year. While on one hand buoyancy seems to be returning in retail space in Ahmedabad in terms of supply, the same may not result in rise in rentals, Business Standard reported, citing sources.

For instance, according to a report by Cushman and Wakefield, a real estate consulting firm, positive economic sentiments coupled with improvement in enquiries have stimulated Ahmedabad’s retail market segment. “Many retailers are anticipating a further improvement in consumer spending and have started executing their expansion plans. As a result, the city recorded a rental growth of 7-11 per cent across most micro markets,” the report stated.

With continued preference for established main streets in the city, areas like SG Highway and Satellite Road remained the most preferred main streets in Ahmedabad, with the latter witnessing the highest rental value growth of about 11 per cent in first quarter of 2011. According to Cushman and Wakefield, The improved sentiments amongst retailers have stimulated construction activities in the city. Ahmedabad, which did not witness any new mall supply in 2010, is expected to record new mall supply of approximately 700,000 sq ft in the next six months.

While many retailers are exploring opportunities for expansion in the city, most of them are cautious about footfalls and revenues. To sustain the positive sentiments, most developers are likely to refrain from any increase in rental values across malls and high streets. “While there are positive signs of improvement in the retail scenario in Ahmedabad with fresh supply set to be added, footfalls will be an area of concern. In recent times, rentals and footfalls have been steady after much correction in the past. However, rentals will only increase when all spaces are utilised. With new projects coming up, it has to be seen how much of retail commitments in these malls are fulfilled and only then can a upward trend in rentals be gauged

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