It’s stupid, if you are not in Gujarat,” said Ratan Tata during his recent visit to Ahmedabad.

A lot of national and international business houses and realtors have already realised the fact and are expanding base in one of the fastest growing cities — Ahmedabad that has already impacted the real estate prices in this city of brick and mortar. The land prices have more than doubled in last one year, leading to an increase in residential and commercial property prices as well.

A property on S G Highway on the city’s outskirts now fetches Rs 6,000-Rs 6,500 per square feet. “Despite this, Ahmedabad continues to attract several leading players as real estate prices are low compared to other cities like Bangalore and Hyderabad,” reasons an industry expert. This is topped by good infrastructure and uninterrupted power supply.

The residential segment is seeing good demand from investors and actual buyers. And the demand in commercial segment is fuelled by retailers and corporates, mainly private banks and stock broking firms which are expanding base here. “The expansion by retailers such as Pantaloons, Reliance and mall projects being developed by local developers have led to increased growth in the retail arena. Around four million square feet of retail space has been added during the last one year,” said Shrenik Shah, head-commercial real estate, Space Management Limited.

Despite the expected oversupply of malls in the city, the mall rentals are going up. The lease rate on ground floor at a mall on S G Highway is around Rs 80-Rs 100 per square feet and that on first and second floor are around Rs 70 and Rs 60 per square feet respectively. The mall mania has gripped Ahmedabad like never before with several residential complexes and bungalows being converted into malls.

Also corporate houses and banks, which are expanding in Ahmedabad are leanding to jump in demand for office spaces in the city. An astounding 25-40 lakh square feet of office space is expected to be added within a year. The price per square feet has gone up from around Rs 1500 a square feet to over Rs 2500 per square feet.

The hot areas for commercial development include Prahladnagar, Ashram road, C G Road, S G Highway and more. With the corporates setting up offices here, the housing demand from their executives shifting base to Ahmedabad is also fuelling the market. “The floating population from different sectors, mainly IT/ITeS will increasingly drive the housing demand in the city. And with rising income levels and higher disposable incomes, the retail sector will also grow,” says Irfan Kureshi, head Gujarat, HDFC.

The residential property prices in city have gone up to Rs 1500-Rs 2000 from around Rs 1200-Rs 1400 a year and half back. Sunita Nair, head- residential services, Trammell Crow Meghraj said, “The residential market in Ahmedabad is expected to further improve. The properties under development are mainly seeing a splurge in demand from investors. Also it has an advantage in price as they are lower compared to those in key metros.”

“The land prices increasing and the input costs are also mounting, leading to an increase in residential and commercial property prices,” says Pranav Shah, managing director of Navratna Organisers and Developers.

While there has been a consistent increase, a few also expect a correction in the market. “A correction is expected in the market. The realtors as well as buyers are incorporating a cautious attitude. However, housing demand will be consistent,” says Kureshi.

With a lot of investment from across sectors pouring into Ahmedabad and neighbouring Gandhinagar, there is a surge in demand for residential and office spaces. A lot of national developers are entering the city, also a lot of local players are joining hands with national players for several commercial projects. “A lot of new mall projects are coming up in the city. However, the question is not that who will buy from these malls, but who will set shop in these malls,” says Pranav Shah.

In my opinion investment in Ahmedabad is really a good option because realty boom is soaring in Ahemdabad now a days. What do u think?
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