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GIFT City, India's first smart city, is witnessing a real estate boom that is capturing the attention of investors both locally and internationally. To cater to the increasing demand, authorities are allocating additional land for the construction of 5,000 residential flats within the township, with a massive 1.2 million square feet open for bidding in a recently released tender.
The surge in real estate activity is evident in the steep 30-35% rise in residential apartment prices in GIFT City over the past few months. Remarkably, despite the price hike, developers report a successful sale of around 80% of the available units even before project completion, signalling a robust market.
Investors are drawn to GIFT City not only for its real estate potential but also for the advanced infrastructure being developed, indicating the city's appeal for long-term returns. Simplicity in business operations and a streamlined one-stop clearance process further sweeten the deal for investors eyeing GIFT City. The city's attractiveness is emphasized by the competitive edge provided by government incentives.
GIFT City is a micro market in the larger real estate market. The government incentives make it attractive. Furthermore, the residential projects in GIFT are majorly being purchased for investment purposes as they have a faster price growth compared with the slow growth for units purchased by end-users. These reasons are likely to have caused a much higher price rise for flats in GIFT City compared with the spike of 15% to 18% in other micro markets around Ahmedabad and Gandhinagar.
However, amidst the optimism, a note of caution is sounded by some. While acknowledging GIFT City's optimistic long-term prospects, experts highlights the current challenges, emphasizing the need for more social infrastructure as currently, the city only boasts a school and a club.
Another challenge is the notable price disparity between residential projects inside and outside GIFT City. Apartments along the adjacent Knowledge Corridor road, which is very close to the GIFT City, are available at a lower price range of Rs. 4,000- Rs 4,500 per square foot. Whether the premium-priced properties within GIFT will generate sufficient returns for investors remains to be seen.
In conclusion, GIFT City in Gujarat has emerged as a lucrative hub for real estate investors, attracting attention locally and internationally. The surge in real estate activity, marked by a substantial price increase and impressive pre-sales figures, reflects investor confidence. However, steps need to be taken to ensure sustainable long-term success in this booming micro-market.
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