New residential launches in Ahmedabad grew by 157% (YoY) in H1 2019; sales grew by 1.5% : Knight Frank ReportJuly 09, 2019
Ahmedabad: After falling to a new low last year due to various reasons, the new launches in the residential realty sector in Ahmedabad, the most populous city in Gujarat, has seen a rise of 157% during first half (H1) of this year (January to June 2019) as compared to the same period of last year (H1 2028).
Sales of residential units in the city has also grew grew by 1.5% (YoY) while volume of office space transacted in city saw 25% increase (YoY) in H1 2019.
A report by Knight Frank LLP the leading independent global property consultancy, headquartered in London, the 11 th edition of its flagship half-yearly report – India Real Estate issued here today said.
The report presents a comprehensive analysis of the residential and office market performance across eight cities Begnaluru, Chennai, Mumbai, Kolkata, Pune, Hyderabad, NCR and Ahmedabad for the period January – June 2019 (H1 2019). The report findings establish that the number of residential launches in Ahmedabad witnessed massive year on year (YoY) increase of 157% in H1 2019 to 3,398 units from 1,323 in H1 2018.
New office space completions in H1 2019 surpassed the previous high to record an increase of 192% YoY. New office space completions was recorded at 0.25 million sq m (2.65 mn sq ft) in H1 2019 from 0.08 mn sq m (0.91 mn sq ft) in H1 2018. Volume of office space transacted in the city saw a 25% increase in H1 2019 to 0.05 mn sq m (0.59 mn sq ft) from 0.04 mn sq m (0.40 mn sq ft) in H1 2018.
RESIDENTIAL MARKET HIGHLIGHTS OF AHMEDABAD:
1. The number of residential units launched in Ahmedabad increased by 157% in H1 2019 to 3,398 from 1,323 in H1 2018.
2. In H1 2019, housing unit sales saw a 1.5% increase to 8,212 from 8,087 in H1 2018.
3. Prices of housing units in the city have largely remained stable in recent years. Weighted average of price has increased by only 1% to 30,677 /sq m (2,850 /sq ft) from 30,354 /sq m (2,820 /sq ft)
4. The unsold inventory was recorded at 10,049 units in H1 2019 recording a 50% yoy drop from 20,120 in H1 2018.
5. The Quarters-to-sell (QTS) stood at 2.5 quarters for H1 2019. The low level of new launches and steady sales has had a bearing on the quarters-to-sell (QTS) and the existing unsold inventory.
6. East and North Ahmedabad are primarily considered to be the affordable markets in the city that witnessed close to 56% of the sales within the city in H1 2019. Some of the areas that witnessed heightened sales activities were areas like Ranip, Chandkheda, Gota, Naroda and Vastral.
7. In H1 2019, North Ahmedabad has the highest level of unsold inventory.
8. The western part of the city, home largely to working professionals, maintained its share in sales, in H1 2019, compared to H1 2018. The areas that witnessed the lion’s share of the activity were areas like South Bopal, areas along Sindhu Bhavan Road and Bopal Ambli Road.
Balbirsingh Khalsa, Branch Director, Ahmedabad, Knight Frank India said, “The market has now adjusted to policy initiatives and in some cases those policy measures have been repealed, which explains the jump in new launches in H1 2019. Steady demand and availability of ready to-move-in houses, within a particular price bracket, ensured that the sales maintained its healthy momentum. On the infrastructure front, an initiative that could have a positive impact on the real estate development of the city, is the widening of SG Highway.”
COMMERCIAL MARKET HIGHLIGHTS OF AHMEDABAD:
1. The city recorded massive increase of 192% in number of new office space completions to 0.25 mn sq m (2.65 mn sq ft) from 0.08 mn sq m (0.91 mn sq ft) in H1 2018. Volume of office space transacted in the city saw 25% increase in H1 2019 to 0.05 mn sq m (0.59 mn sq ft) from 0.04 mn sq m (0.40 mn sq ft) in H1 2018.
2. In H1 2019, the vacancy rate in the city was 34.03%, up from 24.63% in H1 2018.
3. The share of the IT/ITeS sector was recorded at 14% of the total transacted space4. In H1 2019, the manufacturing sector garnered 27% of the total space transacted in the city. Its share stood at 23% in H1 2018.
4. The share of other services sector has moved up in H1 2019 (54%) as compared to H1 2018 (43%).
5. Companies operating in the co-working space picked up 5,848 sq m (62,943 sq ft) of space in H1 2019, which is 20% of the total space picked up by companies in the Other Services sector.
6. CBD West while continuing to be the most prominent office space marketing saw a decline in total share of transacted office space in H1 2019 which was recorded at 52% in H1 2019, of the total transacted space.
7. In H1 2019, within CBD West, SG Highway continues to hold on to its number one position. In H1 2018, its share stood at 32% whereas in H1 2019, the share of SG Highway in the total transacted space in CBD West stood at 34%.
8. The corridor between SG Highway and SP Ring Road is one of the most prized real estate areas within the city and is home to many premium residential as well ofﬁce developments.
9. The share of the peripheral business district (PBD) stands at 43%. The average deal size in PBD in H1 2019 was 3,893 sq m (41,902 sq ft). The locations that were in the thick of action were Nava Vadaj, Ranip, Gota, SP Ring Road, Makarba and Shilaj.
10. Rentals in H1 2019 moved up by 14% compared to H1 2018. As lack of quality ofﬁce space is creating an upward pressure on rentals in the city.
Commenting about it Khalsa, Branch Director, Ahmedabad, Knight Frank India, said “The ﬁrst half of 2019 has been extremely encouraging for Ahmedabad ofﬁce market with massive surge in new completions compared to H1 2018. This was largely because of a huge amount of quality supply entering in micro markets. It goes without saying that slowly but steadily the western part of the city is becoming the nerve centre of the ofﬁce market in Ahmedabad, especially areas along the SG highway. The necessary infrastructure is in place, and of late, developers have moved in to meet the requirements of companies that are either moving into the city or expanding their presence in the city. In the present day, this has led to a situation where the supply outstrips demand. This explains the double-digit vacancy rates in the city, which has increased since H1 2018.”
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