7 mn sq ft office space transacted in Ahmedabad city during H1 2024

Ahmedabad office transactions at all-time high in H1 2024; Residential property sales grows by 17% YoY in H1 2024: Knight Frank India

• 9,377 units sold in H1 2024 registering a growth of 17% YoY
• Sales in ticket size of INR 5 – 10mn and above INR 10mn YoY growth of 6% and 9% respectively in H1 2024

Ahmedabad, 4 July, 2024: Knight Frank India in its latest report, India Real Estate: Residential and Office (January – June 2024) cited that office market of Ahmedabad registered record transaction volumes of 1.7 mn sq ft in H1 2024. Office space completions grew by 578% recording 1.7 mn sq ft units. India facing business remained the dominant occupier in the city.

The Residential sales in Ahmedabad witnessed a growth of 17% YoY, sold 9,377 units in H1 2024, a 10-year high. The new home launches, however saw de-growth of 3% YoY marked at 10,238 units. The residential market in Ahmedabad has recovered and shown steady growth since the downturn experienced during the pandemic, fuelled by rising confidence among homebuyers, which boosted sales volumes.

Office Market Highlights of Ahmedabad

The office market has sustained the demand momentum with H1 2024 taking up the baton from the preceding half year period by scaling a new record high of 0.15 mn sq m (1.7 mn sq ft) of office space transacted during the period. This exceeded the previous record by a substantial margin of 24% and constituted a massive 219% growth in YoY terms.

India facing business remained the key driver of market activity, constituting 77% of the total transacted volume in the city. Occupier demand in this category was well distributed across sectors. Occupiers from the Other Service sectors such as developers, engineers, consultants and healthcare constituted 46% of the India facing businesses while Information Technology companies constituted 38% of the same. The flex office spaces ranked second constituting 21% of the total transacted volume in Ahmedabad.

Balbirsingh Khalsa, Executive Director, Industrial & Logistics and Branch Director – Ahmedabad at Knight Frank India said, “The record transaction volumes seen in H1 2024 and the rents which have grown consistently since H1 2022 reinforce the growing profile of the Ahmedabad office market. The concerted efforts of the state and central governments to transform Ahmedabad into an economic hub, coupled with its affordable real estate and extensive connectivity infrastructure, continue to position the city as an appealing choice for office occupiers.”

 Residential Market Update: January – June 2024

The city saw a rise in the momentum in the residential market with sales posting a 17% YoY growth. Developers have introduced new products tailored to lifestyle preferences, offering enhanced amenities and larger spaces. This strategic move is aimed at capitalizing on the lucrative demand in the market. The average price of residential units in Ahmedabad increased marginally by 1% YoY to INR 3,035 per sq ft.

The residential market in Ahmedabad has recovered and shown steady growth since the downturn experienced during the pandemic, fuelled by rising confidence among homebuyers, which boosted sales volumes. The recovery in demand had culminated in primary home sales scaling a post pandemic high of 16,113 units.

Ahmedabad, with the lowest per square foot residential prices among the top eight markets, historically saw most sales in the affordable category (below INR 5 mn). The share of this ticket-size category has fallen to 39% in H1 2024, below that of the mid-size segment of units priced between INR 5-10 mn which accounted for 41% of the sales in the Ahmedabad market. The share of sales of units priced over INR 10 mn has grown to 20% in the current period compared to 11% a year ago.

Ahmedabad ticket size split comparison of sales during H1 2023 and H1 2024

Source: Knight Frank Research

During H1 2024, the city witnessed a growth of 106% YoY in sales of units priced above INR 10 mn. The ticket size between INR 5mn-10mn saw a growth of 39% YoY while that below INR 5mn saw a drop of 15%.

Ticket-size split of sales

Source: Knight Frank India

 Balbirsingh Khalsa, Executive Director, Industrial & Logistics and Branch Director – Ahmedabad, Knight Frank India said, “The high affordability, comparatively lower prices per square foot, and an improving local economic environment remain compelling drivers for the Ahmedabad residential real estate market. These should help propel sales to new highs in 2024 as we head into the characteristically upbeat festive season in the second half of the year.”