By: Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India
In the past, Ahmedabad – the largest city of Gujarat – was largely thought of as a trading hub with localized market drivers. Today, we can confidently state that nothing could be more further from the truth. Jones Lang LaSalle India made a well-researched move when it launched operations in Ahmedabad in 2009. The decision to enter the city was based on its unmatched promise as a potential real estate investment destination, which factored in the city’s healthy local demand, as well as its outstanding industrial story.
The fact is that Ahmedabad has grown tremendously over the past decade, thanks to ultra-progressive policies and intelligent development governance. The city is providing extraordinary and unprecedented returns on the real estate front, and is one of the most exciting investment destinations in India today. With developers and investors from all over the country beating a straight path to Ahmedabad, the move to launch operations in 2009 has been timely and fully vindicated
Among others aspects, Ahmedabad is a text-book case of a retail boom. Jones Lang LaSalle India’s early entry has resulted in the Firm capturing 70% of the city’s organized retail real estate leasing business. An interesting aspect is the fact that this business was generated not only through our Ahmedabad office but also through our pan-India branches. This alone makes a telling point about the interest that exists for this city on a nation-wide basis.
Office space investments have shown amazing growth, with capital values for commercial properties rising by as much as 20-30% in areas such as Prahladnagar, S.G. Highway, Ashram Road and some parts of East Ahmedabad. Approximately 3.5 million square feet of commercial space has come up in the city over the last four years. Another 1.1 million square feet is currently under construction and another 2.5 million square feet will come up in next 2-3 years. The quality and services of the existing office spaces have risen remarkably in recent times too.
Residential property appreciation in Ahmedabad has been to the tune of 50% over the last three years. The areas currently commanding the highest demand for residential space are South Bopal, Bodakdev, Vastrapur, Nicol, Nava Naroda and New Ranip. Approximately 16 million square feet of built-up residential space has been built in Ahmedabad over the last four years alone. Another 23 million square feet is currently under construction, and a further 30 million is proposed in various parts of the city. This amounts to approx. 70 million square feet of residential real estate, out of which the Western part of the city will account for 47%, followed by 19% in the Southern part and 17% each in Northern and Eastern parts of Ahmedabad. This is a significant supply, and yet residential prices in Ahmedabad market have not softened. This makes Ahmedabad a unique and high-potential market by any standards.
We also have our sights firmly fixed on various industrial corridors like Sanand and DMIC. Thanks to its strong national and global footprint, Jones Lang LaSalle India is eminently placed to cater to the rapidly growing demand for office and industrial real estate in this region. This demand comes from an exciting bouquet of Indian and international players who are eager to open operations in these industrial areas. The prime interest drivers for these players continue to be Gujarat’s admirably progressive stance towards infrastructure and investment flow enablement, and its pro-people orientation to real estate growth.
With Sanand as a stellar upcoming industrial area and prospects of Maruti locating its operations near Bechraji, we see a lot of scope for further development. Hero Motocorp Ltd. has also shown interest for setting up a large manufacturing plant near Halol. To top it off, plans for high-speed rail connectivity between Ahmedabad, Mumbai and Pune are now being discussed, along with the Vadodara-Mumbai Expressway. This holds the promise of even faster growth in industrial strength, as well as in all other real estate verticals.
The Western part of Ahmedabad is definitely emerging strongly and it will continue to gain momentum in the future. Locations such as South Bopal, Ghuma, Shella and Shilaj are definitely on our watch list. Towards the north, Koteshwar has come up as new centre of growth after Chandkheda. Similarly, the East and South have been seeing development along the SP Ring Road.
Jones Lang LaSalle’s global expertise in the real estate business will continue to bring the best pick of domestic and multinational players into the State. With our primary aim being to deliver real value to the Ahmedabad real estate industry, the changes we are witnessing in the city and in many other parts of Gujarat prove to us that we are in the right place, and at the right time.
