Ahmedabad’s commercial real estate market has achieved a remarkable milestone, recording a staggering 3 million square feet of transactions in 2024. This impressive figure reflects an astounding year-on-year growth of 64%, as highlighted by Knight Frank India’s latest report titled ‘India Real Estate: Residential and Office (July - December 2024’).
Apart from these transaction numbers, there has been a big increase in the completion of office spaces in the Ahmedabad and Gandhinagar regions.
Total office space completions went up 45 per cent from 1.9 million square feet in 2023 to an impressive 2.8 million square feet in 2024.
And yes, definitely, the biggest driver for these robust growth figures is GIFT City in Gandhinagar which has positioned itself at such a level to become a central hub for commercial activity in the region.
Economic Hub Gwith
Knight Frank claims that Ahmedabad is on the rise of becoming a prominent economic hub, attributed to the establishment of the International Financial Services Centres Authority (IFSCA) in 2020, with strong support from both central and state governments.
And yet another successful year is over on a great note; 2024 marks the year with the best transaction volumes ever recorded in one year. Although having made it a topic for discussion, transaction volume reached a staggering 3.0 million square feet, up a large 64 per cent on the figures for last year.
This remarkable figure almost doubled the transaction volumes seen in any year before the pandemic struck. The average rent for transacted properties also went up by 5 per cent on a year-on-year basis to Rs 44 per square foot per month.
Indeed, the high growth in the space that this growth has surrounded is a reflection of the burgeoning demand for commercial spaces in the region and the anticipation that Ahmedabad will be an important face in the economic hemisphere.
Market Dynamics
According to the latest analysis, businesses focusing on the Indian market featured the front runners in terms of market activity by sealing a healthy 2 million sq ft (67% of the total transactions). Closely following flexible office spaces at 16% of total transaction volume indicated a steadily increasing demand for adaptable work environments.
The trend of the occupier activity, however, has historically been concentrated in the Central Business District (CBD) West and has notably spread to the Peripheral Business District (PBD) in the second half of 2024. Such a shift is important because the PBD accounted for a remarkable 65 per cent of all transactions within this period, thus diversifying interest and activity beyond traditional core commercial real estate areas.
The Dominance of GIFT City
A report emphasised that GIFT City distinguished itself as a hub of real estate transactions during this period, having accounted for an impressive 82 per cent of the total area transacted in the business district and a huge 53 per cent of the total market transactions.
Though GIFT City is categorised as part of the larger Planned Business District (PBD), it offers well-developed infrastructure, premium environment-compliant properties and policies that encourage a business-friendly environment. "The attributes that make it a unique and thriving office market in its own right," it said.
Higher Growth and Lower Launches
Housing sales recorded a massive jump in Ahmedabad of 15% year on year, going up from 16,113 units in 2023 to 18,426 units in 2024. This shows that the real estate market of the city is very much in demand. Interestingly, properties in the price band of Rs 5 to 10 million accounted for 42% of the total sales volume.
Strategically, developers have chosen to focus on projects that match lifestyle choices, with superior amenities like sophisticated recreational facilities, smart home technology and green spaces, among others.
The idea is to meet tomorrow’s needs and tomorrow’s expectations from the homebuyers. But sales have surged as new residential launches have seen a modest dip of 2 per cent compared to last year.
According to this, while demand increases, developers might be taking care not to bring new projects out into the market, possibly in response to market conditions or regulatory rationales.
Bottom Line
Ahmedabad's growth in the commercial real estate sector is impressive as the city grabbed the place of a dynamic business hub. The strategic location, robust infrastructure and business friendly environment enables the city to attract investors, corporations and entrepreneurs to the city for prime commercial space. So Ahmedabad enjoys a strong footing in the realty picture, this surge is a result of a strong demand for retail, office and industrial properties.
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