Attracting investors both locally and globally, Gujarat is fast becoming a hub for players and industries from across sectors.
The recent spate of investment activity in Gujarat tells a story in itself about the vibrancy of the State in attracting investors from all across. American drug maker Abbott commissioned its first greenfield factory in Jhagadia (Gujarat) to make in India nutritional products with an investment of Rs 450 crore. Ford has decided to set up its second facility in Gujarat to address the North Indian market, which accounts for a major chunk of the automotive market and also to save logistics costs and logistics-related issue. German major BASF inaugurated its chemical manufacturing plant in Dahej with an investment of Rs 1,000 crore, representing the company´s single largest investment in India. Honda Motorcycle and Scooter India (HMSI) laid the foundation stone for its plant in Vithalapur in the Mandal region of Gujarat a few weeks back. All these initiatives have given a major boost to Modi´s call for the ´Make in India´ campaign.
These are just a few recent initiatives. And to further add to the existing infrastructure, the Gujarat International Finance Tec-City - popularly known as the GIFT city project - has decided to launch Phase-II of the project after the Vibrant Gujarat summit 2015 and will be involving a development of 22 million square feet, which is more than double of Phase-I. The pro-activeness of the govern¡ment in facilitating the ease of doing business and also creating investor-friendly policies has helped Gujarat garner both local and global businesses.
What has also helped the State is the efficient and effective use of the PPP model of development. According to an ASSOCHAM study, Gujarat has garnered maximum share of about 36 per cent in the total number of completed projects put to service delivery under the PPP model. Also, of the total 227 PPP projects worth Rs 68,000 crore under opera¡tion in India as of December 2011, Gujarat accounted for about 31 completed PPP projects worth Rs 24,000 crore. Some of India´s first infrastructural development projects like the expressway from Ahmedabad-Vadodara in 2004, Liquid Chemical Port Terminal at Dahej and State-wise gas grid of 2,500 km in Gujarat are through the PPP model only.
Effective implementation of policies and no frequent rollbacks of measures have helped the State push development. Industry experts believe that this has helped the State to rise tremendously and facilitate creation of infrastructure. Overall growth has also pushed the real estate sector in the country.
Ahmedabad´s real estate market is booming because of the huge growth of its industrial sector and overall high rate of development, both in commercial and residential terms. ´There will be a consistent 10-15 per cent growth in property rates across all sectors in Ahmedabad. The exact rate in certain locations will depend on the incidence of market drivers there. Apart from Ahmedabad, Surat and Vadodara also rank high in the State´s real estate sweepstakes. As Gujarat´s second largest city, Surat is all set to become an international diamond trading hub. It is located on the Golden Quadrilateral highway and is well con¡nected to Mumbai and Delhi. These are major market drivers,´ says Santhosh Kumar, CEO - Operations & International Director, JLL India.
Apart from focusing on other infrastructure sectors, Gujarat has also given a lot of prominence and attention to the energy sector. During Narendra Modi´s tenure as Chief Minister of Gujarat, the State became the first large and industrialised State to achieve uninterrupted power supply. ´Gujarat ranks third in total gen¡eration of installed capacity of power among all the States in India, and is a leading producer and user of solar energy. The Gujarat region is the second largest gas-producing region in the country with a share of 10 per cent of the overall gas production in the country,´ says Ashish Tandon, MD, Egis in India. With renewed focus on solar and wind power, industries in Gujarat can be assured of having to face limited power woes.
Ahmedabad - A rising star
Ahmedabad´s real estate market has witnessed a rapid development as compared with other cities of India mostly driven by the high rate of industrial growth. The city is rich in textile, pharmaceutical and chemical industries and is poised to be an automotive manufacturing hub of India.
The favourable factors of safety, security and good infrastructure make it a desirable residential and business destination. The quality infrastructure and highly competitive real estate cost along with good administration of law and order make Ahmedabad a desirable residential and business destination.
The current residential real estate maraket in Ahmedabad is diverse. It has residential units starting from as low as Rs 0.5 million in the affordable category and it goes up to as high as Rs 50 million in the ultra- luxury category. Added to this, Ahmedabad has both mall and high street retail developments with presence of key retail brands such as Reliance, Future Group, Shopper´s Stop, etc. Meanwhile Prahaladnagar and the Satellite area have emerged as the new office hub of Ahmedabad. Along with all the above, the Gujarat International Finance Tech City (GIFT), an 886-acre development near Ahmedabad is planned to be developed as a ´smart city´ with high quality infrastructure.
Ahmedabad has quality infrastructure with India´s most successfully running Bus Rapid Transit System (BRTS). This project contributed towards the rise of real estate prices at a few pockets on the outskirts of the city. There is a plan to increase FSI and have a Transit Oriented Development along the BRTS corridor. These will further boost the economic and allied activity in Ahmedabad. The city has the Sabarmati Riverfront project which plans to provide large open spaces for public use. In addition, there is a proposal to connect Gandhinagar with Ahmedabad using the Metro system. This is expected to hike the real estate prices along certain sections of the Metro corridor between Ahmedabad and Gandhinagar. Moreover large-scale industrial developments at Sanand and Bechraji (near Ahmedabad), are planned to be developed as an automobile manufacturing hub in India. The government has also taken the initiative to develop affordable housing which will not only check the slum growth in the city but also provide employment opportunities.
With relatively low costs compared with other large cities in India, coupled with the proactive development approach of the government and local authorities, Ahmedabad is poised to grow at a faster pace.
- Ashutosh Limaye, Head -Research & Real Estate Intelligence Service, JLL India