Real estate business booming in GIFT City

Source: Financial Express

India’s first smart city GIFT (Gujarat International Finance-Tec City) is witnessing an unprecedented boom in the real estate sector. This has prompted the GIFT Authorities to allocate additional land for the construction of 5,000 residential flats. A tender for the construction of residential infrastructure on 1.2 million sq ft of this additional land is already open for bidding.

The prices for residential apartments in GIFT City have witnessed a steep 30% to 35% surge in the past few months. The real-estate developers, who are developing residential projects in GIFT, said that despite the price rise, they have been able to sell around 70% to 80% of their inventory before the completion of the projects. Not only that, as per the developers, the returns on investments in GIFT City may outdo realty projects in other parts of the country with prospective buyers willing to shell out extra for the state-of-the art infrastructure being developed in the city.

Speaking about the prospects of the realty business in GIFT City, Taral Shah, Managing Director, Shivalik Group, said, “The investors are bullish about the future prospects of GIFT City. We are seeing investors coming from not only the state but international and national investors from Delhi Mumbai and South Indian states are also taking keen interest in GIFT City. The ease of doing business, single window clearance and the infrastructure provided by the city will make GIFT a more desirable destination than any other region in the country.”

Deep Vadodaria, Director, Nila Spaces, developing residential as well as commercial projects at GIFT City, said, “In the span of 15 months the prices for Nila’s residential project, VIDA Project, has touched Rs 18,000 per sq ft from Rs 12,500 per sq ft when they launched, a 30% hike. “Nila Spaces has been able to sell out around 70% of our total units in advance. The VIDA Project includes Studios, 1BHK, 2BHK and 3BHK apartments and the price range is between Rs 87.50 lakh (for a Studio) to Rs 2.15 crore (for a 3BHK).”

Taral Shah of Shivalik Group, further said, “Shivalik Group has sold more than 80% of our units in the residential project named ‘Skyview’ at GIFT City. When we started the bookings, the prices were at Rs 5,500 per sq ft and currently the prices are at Rs 7,500 per sq ft. There is a good demand for quality products and we have been able to sell around 360 units of our 420 total units in ‘Skyview’.”

Nagendra Singh Rathore, a real estate analyst, said, “To compare GIFT with other regions around Ahmedabad and Gandhinagar, it must be kept in mind that similar to other market pockets like Gota, Shilaj, ISKON and Vaishnodevi, GIFT also is a micro market in the macro real estate market. It is a government project with government incentives and that makes it a focus. Furthermore, the residential projects in GIFT are majorly being purchased for investment purposes as they have a faster price growth compared to the muted growth of pure residential products which are bought by the end-user for personal use. This is the reason that GIFT has witnessed a much higher price rise compared to the spike of 15% to 18% in other micro markets around Ahmedabad and Gandhinagar.”

“Given its acceptance as a viable investment option in view of the current political backing and government support, there is no doubt that GIFT City will be one of the most lucrative real-estate investment opportunities for the long term”, said Rathore.

Among the state of the art infrastructure facilities GIFT boasts of are its own captive power plant, central air conditioning unit, easy payment facilities, sewage management system and a unified garbage collection system and a common utility tunnel are some of the major services for the businesses and residents of the city. Furthermore, the authorities are planning to create a vibrant social infrastructure inside the city so the residents can maintain a healthy social life.

However, a real estate analyst, on the condition of anonymity, struck a cautionary note “Though the long term prospects for GIFT City’s social infrastructure are very optimistic but the challenge lies in the present. Currently, GIFT City has only a school and a club in the name of social life. The real growth potential can be assessed only after people start to live there.”

“Another challenge is the stark price difference in the residential projects inside and outside the GIFT City. For example, the adjacent Knowledge Corridor road, which is just a stone’s throw away from GIFT, has apartments available in the price range of Rs 4,000 per sq ft to Rs 4,500 per sq ft. In this case, whether the premium price properties at GIFT will be able to generate enough returns for their investors, is yet to be seen”, he added.