Despite Ahmedabad witnessing mere eight per cent rise in capital values, the city is set to add almost 50,000 residential units in next three years, according to a report by Cushman & Wakefield, a real estate consulting firm.
Of these, about 32,000 units are set to come up in two years.
"Ahmedabad's residential market has been stable over the year and demand has been mainly driven by investors. Should the Government consider revising the Development Control Rules (DCR) it is likely to notify an increase in FSI in R2 & R3 zones, which will positively impact the residential markets with increased new launches," said Sanjay Dutt, executive managing director, South Asia, Cushman & Wakefield.
According to the report, more than 75 per cent of these under construction projects are concentrated in the peripheral locations such as SG Highway, SP Ring Road, Bopal, Naroda, Vejalpur and Vadsar-Kalol Road as they witnessed heightened interest from end-users and investors in last two years
Of the total residential units nearly 85 per cent (27,000 units) cater to the mid-segment category. "High end developments have also gained prominence with around 4,100 units under construction in locations such as S.G Highway, Vejalpur, Prahlad Nagar and Thaltej," the report stated.
In terms of capital values, overall growth in the market was reported at six per cent. However, mid-segment projects, that are nearing completion, have seen values increase by upto 10 per cent in locations such as Bopal, Navrangpura, Shahibaug, Gulbai Tekra and Paldi in the last six months. Mid segment capital values in SG Highway witnessed 15 per cent increase over the year while Prahlad Nagar saw an increase of six per cent.
Although the most active segment is the mid income group, there is a rising interest for high end projects that lead to increase in values upto 13 per cent over the year. Vastrapur saw significant increase of 13 per cent followed by Satellite that noted a 10 per cent increase over the year.
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According to Cushman & Wakefield, Ahmedabad's office market has attracted steadily increasing demand from Small and Medium Enterprise (SME's) and branch offices of large companies leading to an increase in quality supply, which is expected to be approximately 3.3 million sq ft (msf) by end of this year.
This is due to Ahmedabad turning out to be an attractive employment destination, demand for housing in the affordable and mid segments has been strong.
Further, a growing and increasingly upwardly mobile population is spurring growth in the city’s retail sector. Besides the vibrant high street retail business, Ahmedabad now has 14 operational malls covering a total space of 4.56 msf. The city is expected to witness office space supply of approximately 3.3 msf by end of the year, which will be 16 per cent higher than previous year. Ahmedabad has witnessed 1.4 msf of supply in the first half of the year with approximately 1.80 msf likely to be operational in second half.
On the retail front, Ahmedabad has a total of 14 operational malls with a total space of 4.56 msf majority (38 per cent) of which are concentrated on S.G Highway.
The highest rental increase of 33 per cent over previous year was noted in Vastrapur, followed by Mani Nagar, which recorded an increase of 18 per cent led by demand for quality space in mall developments.
Cushman & Wakefield had recently opened its office in Ahmedabad.