With much of the industrial development happening in and around Ahmedabad, Vadodara and Surat, the three major cities of Gujarat are emerging as next best option for office space in real estate market for firms based out of metros, says a real estate monitor by Jones Lang LaSalle India (JLL) for the month of July.
As per the report, the proposed Delhi Mumbai Industrial Corridor (DMIC) and Mumbai Ahmedabad Bullet Train projects are expected to fuel this development even further in Gujarat. DMIC connects three prime cities, namely Ahmedabad, Vadodara and Surat, which will form the key growth nodes of an industrial cluster development in the coming years.
"DMIC will make large tracts of land along the corridor available for industrial and other real estate development purposes in the form of Investment Regions and Industrial Estates. The three major cities of Gujarat will eventually cluster together and experience an integrated industrial development," the report stated.
To begin with , Ahmedabad, with textile manufacturing traditionally as its major industry, is emerging as an automobile-manufacturing hub with the onset of Tata Nano car plant, investments from Peugeot, as well as Ford and Maruti Suzuki planning to invest in the city.
"Earlier, large corporates intending to move out of metros had eyes on Bangalore, Pune and Hyderabad as next destinations. However, with much of the industrial development happening in and around Ahmedabad, Vadodara and Surat, these cities of Gujarat are now emerging as next best option for corporates looking for office space," said Anuj Puri, Chairman and Country Head, Jones Lang LaSalle India (JLL).
According to the real estate consulting firm, development of the three cities as industrial cluster will boost office space in terms of capital values which have risen by anywhere between 10 and 30 per cent in the last 2-3 quarters.
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Further, although most of the development in Ahmedabad is currently focused towards the western parts of the city, major road networks NH 8 and NE 1 will connect the city to Mumbai and Vadodara and they are expected to be the growth corridors of future. It has also been proposed that the Ahmedabad-Dholera Special Investment Region (SIR) be developed among the DMIC. These developments will slowly merge with Vadodara to form the second node of the industrial cluster.
On its part, Vadodara's economy is driven by the chemicals, petrochemicals, pharmaceuticals and biotechnology industries. Biotechnology and petrochemicals sectors will be the sectors to invest in Vadodara in future. Apart from Ahmedabad-Vadodara Expressway, another expressway is proposed from Vadodara to Mumbai, connecting to Surat, which is the third node of cluster.
According to JLL's monitor, it has been proposed that the Surat Navsari Industrial Area be developed along the DMIC which will pass through eastern Surat. The developments along these road networks will eventually merge these two cities.
"Urbanisation along the DMIC will merge these three cities into an important industrial cluster. This cluster is expected to attract large investments due to the business-friendly environment created by the DMIC with support from the state government. The industrial development will cascade other real estate developments such as integrated townships," the report stated.