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In a remarkable transformation over the past three years, GIFT City, Gujarat's ambitious International Financial Services Centre (IFSC), has evolved into a bustling business hub, drawing attention from a diverse array of industries. Once facing a scarcity of demand, the city is now grappling with a shortage of commercial space as numerous companies flock to set up shop.
Dhruv Patel, the president of the Ahmedabad chapter of the Confederation of Real Estate Developers Associations of India, remarked that three years ago, the demand was minimal. However, he noted a significant increase in companies since then. This surge, he explained, was a consequence of the establishment of bullion and currency exchanges, along with GIFT Nifty. This development has led to a scenario where demand surpasses the available supply.
The recent government decision to permit liquor sales in GIFT City has further fuelled this growth. The lifting of the ban on alcohol sales, a previous deterrent for professionals considering a move to the city, is anticipated to boost demand even more.
As of September 2023, GIFT City boasts 23 offshore banking units, 70 brokers, 19 clearing members, and five global custodians, according to data from the IFSCA. Additionally, the city hosts 68 schemes operated by various alternative investment funds and 73 registered insurance funds. Notably, 136 asset leasing entities and 54 ancillary service providers, including law firms and consultants, contribute to the city's diverse business landscape.
The government's initial vision for GIFT City as a competitor to global financial hubs like Singapore and Luxembourg has expanded. It is now positioning the city as an innovation hub not only for banking and financial services but also for higher education, attracting entities ranging from domestic brokers to aircraft leasing companies.
However, the rapid growth has posed challenges, particularly in the availability of commercial space. GIFT City, unlike some global financial hubs, mandates a physical presence, disallowing virtual registrations. To address the shortage, interim measures have been implemented, allowing companies to register in the Special Economic Zone (SEZ) by leasing a minimum of four seats in co-working spaces.
Emphasizing an inventive strategy for addressing the space shortage, Jaxay Shah, the founder and CMD of Savvy Group, mentioned the establishment of a temporary space in a dome structure with lockable cubicles to meet immediate spatial requirements. Savvy Group, renowned for its numerous projects in GIFT City, including co-working spaces like Pragya Accelerator-1, is actively responding to the changing demands of businesses in the region.
Several firms, including Australia's Deakin University, have opted for co-working spaces to kickstart their operations in GIFT City. The IFSCA has responded to the demand by approving permits for new buildings, with around 20-25 under development and more applications pending.
Taral Shah, MD of Shivalik Group, a leading real estate developer in Ahmedabad with projects in GIFT City, is optimistic. "There are 20-25 buildings under development, and in 2-3 years, the shortage will be under control and resolved."
GIFT City's journey from a concept facing skepticism to a thriving business hub showcases the adaptability and resilience of this ambitious project, offering businesses a unique platform for growth and innovation.
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