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India’s first smart city GIFT (Gujarat International Finance-Tec City) is witnessing a real estate boom. GIFT City has seen a record bid of INR 3,870 per sq feet (plus 6% stamp duty) for a residential project bid. According to sources, the developer, Yogi Construction Company, will pay around INR 450 crore to GIFT City authority for transfer of development rights. The present project will come up on a 9,400 sq metres plot. According to sources, this will be the biggest residential project so far in GIFT City.
The plot is situated in the domestic zone of the GIFT City and the bids were invited for around 11.60 lakh sq feet development rights. Base price of development rights in GIFT City is around INR 1,600 per sq feet. Around 14 developers had bid for the project and a lesser-known Yogi Construction Company won the bid with INR 3870 per sq ft while Nila Spaces Ltd stood second with a bid of INR 3,636 per sq feet. Total five bidders quoted above INR 3,000 per sq feet.
Real estate experts believe the bid price is much higher than most developers thought because apart from development rights, construction cost will also be higher for a luxurious residential project. As per the developers, the returns on investments in GIFT City may outdo realty projects in other parts of the country with prospective buyers willing to shell out extra for the state-of-the art infrastructure being developed in the city.
The prices for residential apartments in GIFT City have witnessed a steep 30% to 35% surge in the past few months. The real-estate developers, who are developing residential projects in GIFT, said that despite the price rise, they have been able to sell around 70% to 80% of their inventory before the completion of the projects. Ahmedabad-based Shivalik Group, which has sold 80% of its residential projects in GIFT City, says it is currently selling homes at INR 7,500 per square feet while it was selling at INR 5,500 per square feet just one-and-a-half years ago.
According to the GIFT City masterplan, a total of 25,000 housing units are expected to be built. GIFT City had attracted 10 real-estate developers for initially building around 5000 houses as part of the project. The developers, including Savvy ATS Realty, Shivalik LLP, Shilp Infraspaces LLP, Bakeri Residences LLP, and Bhandari and Sangath Builders LLP are building house in the SEZ area of GIFT City, while Sobha Ltd, Sangath IPL, Nila Spaces, Kaavyaratna LLP and State Bank of India (housing project for its own employees) are constructing in the Domestic Tariff Area. As the demand is booming, the GIFT Authorities decided to allocate additional land for the construction of 5,000 residential flats in the domestic area.
GIFT City has a world-class infrastructure in place and it is designed as an international smart city. The International Financial Services Centre (IFSC) has witnessed interest from global banks and funds and foreign universities. Domestic zone of GIFT City has also seen the arrival of global tech giants like Google. Around 20,000 employees are already working in GIFT City and with new companies coming in, the number will increase soon.
As per developers, the GIFT City project would essentially be a “leasing market” as far as residential spaces are concerned. Ahmedabad Realtors Association president Pravin Bavadiya points out that the percentage of investors who have parked money in housing projects is as high as 85%. A majority of those purchasing residences in the area are investors who are either NRIs (Non-Resident Indians) or are from Mumbai or South India. Going forward, those who work in GIFT City are largely expected to lease these homes.
In conclusion, GIFT City is experiencing a remarkable real estate surge. With world-class infrastructure and growing interest from global banks and companies, GIFT City is positioned as a leasing market for residential spaces, attracting investments and fostering a vibrant real estate market in this international smart city.
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