Gujarat: The Land of Opportunities and Investment
The real estate sector in India is soaring. According to the India Brand Equity Foundation (IBEF), the real estate market is expected to reach USD 1 trillion by 2030 and will contribute 13% of the country’s GDP by 2025. The commercial, residential and hospitality sectors in real estate are growing faster and providing the much needed infrastructure.
In India, the hot real estate investment locations are metro cities like Bangalore, Mumbai, Delhi, etc. But there’s a dark horse in this race which has slowly evolved as one of the leading investment options - Gujarat.
Gujarat owns 6% of India’s land area and 5% of the population. It contributes 7.5% of the GDP, 10% of the industrial output, accounts for 19% of India’s exports and 41% of the country’s cargo. The real estate investors have seen huge returns in the last few years. According to MagicBricks, there has been a whopping 2530% price increase in the office and commercial properties in areas like Productivity Road, Old Padra Road, Sayajigunj and Alkapuri.
But how did Gujarat become the noticeable and prominent zone for investments? A number of factors work in favour of the booming investment sector in Gujarat:
- Purchase Affordability: The capital value for the land and the real estate is anytime significantly lower in Gujarat than that in Mumbai, Bengaluru or any other fast-developing states. The state offers a relatively lower cost of operations due to the lower cost of real estate and lower compensation levels. This is one of the major reasons for the investment shift to Gujarat.
- Inter-state Connectivity: The well-structured interstate and intrastate connectivity add to its commercial value. DMIC or the Delhi Mumbai Industrial Corridor is going to include a number of smart cities, Special Economic Zones (SEZs) and infrastructure. 40% of this corridor falls within Gujarat, hence the government is developing a number of large-scale Special Investment Regions (SIRs).
- Infrastructure: The state has superior infrastructural facilities and locations to strategically design and place commercial buildings. This might attract investors from outside too to invest in the real estate market.
- Ease of doing business: The World Bank's 2019 Ease of Doing Business (EODB) survey found India advancing to an overall ranking of 63. As per the Economic Times, Gujarat is ranked fifth in the country for the Ease of Doing Business survey in 2018. The Gujarat government is reforming the land acquisition norms along with a policy-driven administration to make the business process even simpler.
- GIFT City: Gujarat has India’s first SEZ for International financial services, Gujarat International Finance Tech City or the GIFT city. GIFT is attracting interests from many domestic and global corporations from the financial services and other sectors. It directly impacts the quality office space requirement in the GIFT SEZ and domestic areas. The Bombay Stock Exchange has established its international exchange here and a large number of brokers have already set up their base here. This opens up opportunities for real estate investments as the city offers world-class infrastructure.
- Growing Industrialization: Gujarat is among the first states to invite industries from different states to come and set up their plants. The state has ample land compared to other states to offer to developing industries, and also provides favourable conditions and lenient policies.
One of the biggest examples of the industrial shift is the shifting of the Tata Nano plant from West Bengal to Gujarat. Honda and Mahindra motors have also set up their plant in Mehsana and currently have thousands of employees.
- Make in India: The Make in India campaign launched in 2014 emphasizes on the Gujarat Industrial Policy. It is a strong initiative to improve the business environment. Gujarat promotes the development of small and medium-sized enterprises. Various policy-making, venture capital assistance, and quality certifications have been initiated to achieve that. Out of the total planned Built-Up Area (BUA) of 62 Mn. Sq. Ft., 15 Mn. Sq. Ft. of BUA have been allotted for the development of commercial, residential and social facilities.
- Growing IT Sector - The IT-ITeS sector is growing exponentially in Gujarat. Ahmedabad, Gandhinagar, and Baroda are becoming the IT hubs of the state. More than 100 companies in ITeS (Information Technology enables Services) segment have been registered with the Commissionerate of Information Technology. The state has a strong communication network, with more than 60,000 kilometres of the optical fibre network. This coupled with superior physical infra and policy amendments works in the favour of making Gujarat the next IT hub.
The realty market in Gujarat is growing and is proving to be a promising sector. The progressive policies and fast-track norm reforms show an assuring future for investments. It is becoming a one-stop solution for real estate investments as the ROIs are extraordinary.
The new approach is opening gates for investors from other states and countries. With the increasing space and land crunch in other cities like Mumbai and Bengaluru, people are now turning to the western part of the country and the surge is only going to increase from here.