Ahmedabad : Gujarat’s Shining Jewels

Ahmedabad : Gujarat’s Shining Jewels

Like any other developing nation, India’s economic growth is highly dependent on infrastructure expansion. The Central Government has recognized the importance of infrastructure in promoting the economic growth of the country – its ambitious ‘100 smart cities’ programed is one of the major factors pushing development in recent times. The Prime Minister’s ‘Make in India’ initiative, launched with the aim to turn India into a global manufacturing hub, has added to the infrastructure growth story. The recent developments in infrastructure, such as the Metro in various cities, Yamuna Expressway, the upcoming Gujarat International Finance Tec- City (Gift City) near Ahmedabad and the new airports that have come up in New Delhi, Hyderabad, Mumbai, Bengaluru and Kolkata, are at par with their international counterparts.

Innovative ventures, such as the solar power project over the Narmada Canal, have added a new dimension to infrastructure development in the country. The Dedicated Fright Corridor (DFC), The Delhi-Mumbai Industrial Corridor (DMIC), The Amritsar Delhi Kolkata Industrial Corridor (ADKIC) and The Chennai – Bangalore Industrial Corridor are the Projects that will prove to be game-changers in India.

Fact Sheet of Gujarat :

  1. 10th Most populated State in the Country
  2. 7th Largest State in the Country in terms of area
  3. Contributes 45% of the country’s exports from SEZs
  4. Gujarat Produces 91% of India’s requirement of soda ash, 66% of national salt requirement & more than 35% of India’s chemicals.
  5. State’s economy grew by 10% YoY in 2003-04 & 2012-13

Gujarat is the most industrialized state in India and leads in the production of pharmaceuticals, soda ash, salt, plastics, petrochemicals and chemicals in the country. Gujarat is among the major beneficiaries of the DMIC. Besides the Ahmedabad- Dholera Investment region, four other nodes have been proposed on the DMIC corridor in the state. The proposed Delhi Mumbai Industrial Corridor (DMIC)covers approximately 62 per cent of Gujarat’s land area and passes through Ahmedabad, Vadodara and Surat – one of the most industrialised regions of the country. The implementation of DMIC initiatives between Ahmedabad and Surat will lead to further development, industrialization and improvement in infrastructure along this stretch. The groundwork has already begun between Ahmedabad and Dholera in the first phase.

Ahmedabad, the commercial capital of Gujarat, is the largest city in the state. The city has been undergoing significant transition since the 2001 earthquake caused large-scale devastation. Nine years later, Forbes deemed Ahmedabad one of the fastest growing cities in the world, behind Chengdu and Chongqing, both in China. At the core of this development is a focus on infrastructure and manufacturing. The rapid pace of development sweeping Ahmedabad has now almost reached Gandhinagar. The two cities, along with Sanand, are set to form the largest urban agglomeration in Gujarat in the near future.

The Gujarat International Finance Tec-City (GIFT City) is located 12 km from Gandhinagar and 25 km from Sardar Vallabhbhai Patel International Airport. This heightened state of development in Ahmedabad is not restricted to the northern part of the city. Work on the Ahmedabad-Dholera Special Investment Region node of the DMIC has commenced, and this has fuelled real estate development on the Ahmedabad-Dholera stretch, southwest of Ahmedabad city. The proposed DMIC will tower above all the other infrastructure projects in the country. With Gujarat taking the lead in its implementation, cities on the DMIC in the state will reap immense benefits. Ahmedabad is the largest city in Gujarat and within the influence zone of DMIC. This locational benefit will augur well for the state’s commercial capital.

Ahmedabad is one of the most progressive districts in Gujarat and is ahead of the state on most demographic parameters. The city’s social infrastructure is vibrant, which adds to its quality of life. Ahmedabad is one of the oldest centres of learning in India. Some institutes that are functional even in the present day were established during the pre-independence era. The city is also home to some of the best medical establishments in the country.

Select Higher Educational Institutes in Ahmedabad & Gandhinagar :

1871 – B.J.Medical College – Asarwa                                                     1920 – Gujarat Vidyapith – Ashram Road

1961 – Indian Institute of Management – Vastrapur                            1961 – National Institute of Design – Paldi

1962 – Central Environment Planning and Technology University – Navrangpura

1983 – Entrepreneurship Development Institute of India – Bhat          1991 – MICA – Shela, Ahmedabad

1995 – National Institute of Fashion Techonology – Gandhinagar       2004 – Gujarat National Law University – Koba, Gandhinagar

2007 – Gujarat Techonology University – Gandhinagar                        2009 – Adani Institute of Infrastrure Management – S.G Road, Ahmedabad

The residential property market in Ahmedabad city has remained largely subdued. As a result of the subdued demand, new launches have been restrained. Integrated townships, developed largely in the western part of the city, are a new trend in Ahmedabad’s residential real estate space. National level developers such as Godrej Properties have moved into this space. Some of the integrated townships coming up in the city include Godrej Garden City, off S.G. Road; Shantigram by Adani Group, near S.G. Road; Applewoods by Sandesh Group on S.P. Ring Road; Smile City by Ganesh Housing Group, near S.P. Ring Road; and a project by Savvy Infrastructure near the Godrej Garden City project. The western and northern parts of the city have been witness to the lion’s share of new developments in Ahmedabad. Other parts of the city, however, have developments on a much smaller scale.

WAREHOUSING DEMAND ON A RISE

WAREHOUSING DEMAND ON A RISE

Logistics and warehousing constitute a critical link in the chain that connects the manufacturer to the eventual consumer. It is the efficiency of a business’ logistics and distribution machinery that dictates their reach, time to market and cost efficiencies which prove to be a big factor enabling businesses to stay relevant in today’s ultra-competitive environment. This is especially true in the internet age where businesses are forced to constantly cut costs to acquire or retain consumers.

The Government of India recently released the draft framework of its first ever logistics policy. The primary aim of this policy is to enable integrated development of the logistics sector in India. Despite being a key economic driver, the industry suffers from inefficiencies and wastages leading to high costs. Logistics cost in India, as a percentage of GDP, is as high as 13%-14% while its global counterparts stand at 8%-10% of GDP. The primary reason for such high costs is the highly unorganized nature of this industry and the highly skewed multi-modal mix. Approximately, 60% of freight movement in India happens via road which is significantly higher than most developed economies. Globally, the share of rail cargo in the multi-modal mix is higher. Further, different parts of the logistics value chain are currently being managed by numerous
departments and ministries. The result of these multiple hurdles is increased inefficiencies in the logistics industry. The Center has begun to address this issue; first, it granted infrastructure status to the logistics and warehousing industry in 2017, and second, it has advocated an independent policy framework for this sector. The final policy is expected to be notified soon and the national act will serve as a guideline in terms of laying down a common national outlook for states to draft their respective policies. Following are the key takeaways from the national document

At a time when the Indian real estate industry has been facing headwinds on account of a difficult residential market, the warehousing property segment has emerged as a promising investment opportunity for institutional investors. Since 2014, the sector has propelled into a different trajectory. The implementation of GST, the continued government focus on building industrial corridors, the ‘Make in India’ thrust on manufacturing and the promise of the Indian consumption market has whipped up the investment prospects of the country’s warehouse property sector. Investors had started taking cognizance of the opportunities in the warehousing sector much before the government began toimplement the reforms, such as GST, and granting infrastructure status to the logistics industry, including warehousing.

The sector has witnessed massive participation from institutional investors, as well as developers, who have collectively invested over USD 6.8 billion since 2014, with an average investment per deal of USD 282 million.

In Ahmedabad City Most of the warehousing activity is concentrated on the Ahmedabad-Kheda highway and Ahmedabad-Rajkot highway. Additionally, Sanand – Viramgam and Vithalapur – Becharjai Belt  has also been attracting interest from warehouse developers over the last few years, but is still a relatively smaller market compared to the other two locations. Before the National Expressway-1 (NE-1) was constructed, the Ahmedabad-Vadodara highway used to be the primary access road between Ahmedabad and cities like Vadodara, Surat and Mumbai. Aslali, which is located on this highway just before entering Ahmedabad city from the south, was a major transit point for all transporters and logistics players. With increased urbanisation and rising land prices, warehousing development started shifting southwards on this highway towards Jetalpur and Bareja. The Vithalapur–Becharaji cluster has been the latest entrant in the warehousing market in the city. The primary reason for the boom of the warehousing sector in this area is the entry of automobile giants in the Mandal Becharaji Special Investment Region (SIR). It is generally believed that the Mandal Becharaji SIR will become the largest automobile hub, in the country, going forward, which will further boost demand for warehouses in the area. The growing importance of this belt can be gauged from the fact that even though it has been a late entrant, of the total transacted space in 2018, this area accounted for one-third of the space.

The annual transaction volumes of warehousing space for the Ahmedabad warehousing market in 2017-18 was 3.30 mn. In 2018-19 warehousing market was 4.9 mn which transaction volumes recorded 51% YoY growth over 2017-18. 2018 saw a substantial 77% growth to 4.3 mn sq m (46.2 mn sq ft) in the total area transacted in the top eight warehousing markets in the country. This follows an even more significant 87% year-on-year (YoY) growth seen during the previous period and depicts a strong growth trend.

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