Ahmedabad's commercial property sector is experiencing a resurgence, with new project launches expected to grow by 20-25% this year. This increase follows a period of low activity due to the COVID-19 pandemic. Data from GujRERA reveals 22 new commercial and 70 mixed-use projects in FY 2024-25, compared to 67 and 236 respectively in the previous year. Transaction volumes for office spaces surged by 219% in H1 2024, with significant contributions from local and out-of-state businesses. Despite a sluggish retail segment, the commercial market's recovery suggests a positive outlook for Ahmedabad's real estate sector.
Ahmedabad is witnessing a rise in its commercial property sector. The city is experiencing a significant uptick in the number of new projects, with estimates suggesting a growth of 20-25% in commercial property launches this year. This revival comes in light of increased demand for office spaces and a notable decrease in inventory as fewer projects were initiated during the past few years, primarily due to the COVID-19 pandemic.
Recent data from the Gujarat Real Estate Regulatory Authority (GujRERA) shows that 22 commercial projects and 70 mixed-use developments have been launched in fiscal year 2024-25 thus far. By contrast, there were 67 commercial and 236 mixed-use projects launched in the previous financial year. The pre-pandemic years saw more robust activity, with 108 commercial projects launched in 2019-20. This trend indicates a gradual recovery in the sector, particularly as developers ramp up efforts to meet the growing demand for office space.
Real estate experts point to a shift in preferences among businesses, with many seeking larger office configurations. Shekhar Patel, the national president (elect) of the Confederation of Real Estate Developers Associations of India (CREDAI), remarked that Ahmedabad is experiencing a notable increase in demand for commercial spaces, especially in key areas like SG Road. This demand stems not only from local businesses but also from out-of-state companies looking to expand their footprint in the city, leveraging its favorable economic landscape and accessible infrastructure.
A recent report by Knight Frank India highlighted that 1.7 million square feet of office space was transacted in the first half of 2024, marking a substantial 219% increase compared to the same timeframe in the previous year. The report pointed out that the city saw comparable transaction volumes for completed office space, signifying strong market activity. The surge in transactions can be attributed to the performance of India-facing businesses, which accounted for 77% of the transacted volume, while sectors like consulting, healthcare, and information technology made significant contributions to this growth.
While the commercial sector appears to be thriving, the retail segment is reportedly lagging, reflecting broader trends in consumer behavior and shopping patterns. However, industry veterans remain optimistic about the retail market's future, anticipating a recovery as the overall real estate sector stabilizes. A leading developer stated that they expect commercial project launches to exceed levels seen in 2021-22, driven by the increasing demand.
In summary, Ahmedabad's commercial property market is on a promising upward trajectory. The combination of low inventory levels, heightened demand for larger office spaces, and an overall recovery from the impacts of the pandemic positions the city for continued growth. As developers prepare for more launches, stakeholders are hopeful that the retail sector will also begin to show signs of recovery, bringing balance back to the overall real estate landscape in Ahmedabad.
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