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In the face of rising land prices, real estate developers in Ahmedabad are increasingly turning to joint development agreements to mitigate financial strains. The move follows a sharp increase in jantri rates and the associated high premium Floor Space Index (FSI) charges.
The city's real estate landscape is observing a boost in joint development deals. Two of the city's leading developers have formed alliances with groups of landowners to embark on new projects, a trend that has emerged in response to the escalating land prices that complicate the allocation of substantial capital for land procurement.
The past couple of months, subsequent to the enforcement of the new jantri rates, have witnessed two premier developers—the Bakeri Group and the Shivalik Group—signing joint development agreements with various landowner groups.
Making its debut into joint development, the Bakeri Group has announced a partnership with a group of landowners to build a residential complex spread over an estimated 5 lakh square feet in Shilaj.
In a similar move, the Shivalik Group has finalized a joint development project at Vaishnodevi Circle. Unnamed sources confirm that the plot, approximately 13,500 square yards, is set to house a 30-story commercial project spanning nearly 10 lakh square feet of built-up space.
Joint development projects, where developers either pay half the land price or give a deposit ranging from 5% to 30% for the land, followed by a shared investment in construction costs and revenue, are therefore on the rise. These arrangements allow developers to sidestep hefty initial capital investment in land while offering landowners potentially higher returns than traditional land sales.
In conclusion, Ahmedabad's real estate sector is witnessing a strategic shift towards joint development projects as an effective response to skyrocketing land prices. As developers and landowners forge cooperative alliances, this innovative approach promises to reshape the city's property market while ensuring better financial viability for stakeholders involved.
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