Ahmedabad residential sales surges 15% YoY in 2023; Knight Frank India
India-facing business accounted for 73% of office leasing volume in Ahmedabad in 2023: Knight Frank India
- 16,113 housing units sold in 2023 registering a growth of 15% YoY
- 22,497 units launched in 2023 registering a growth of 8% YoY
- Sales in ticket size of INR 5 – 10mn and above INR 10mn saw massive YoY growth of 41% and 59% respectively in 2023
- 3 mn sq ft office space transacted in H2 2023, highest ever in a half-yearly period
- New completions recorded at 1.9mn sq ft, a growth of 33.7% YoY in 2023
Ahmedabad, Knight Frank India in its latest report, India Real Estate: Residential and Office (July – December 2023) cited that Residential sales in Ahmedabad witnessed a growth of 15% YoY from 14,062 units sold in 2022 to 16,113 units sold in 2023. The new home launches increased by 8% YoY from 20,809 units in 2022 to 22,497 housing units in 2023. The Ahmedabad homebuyer remained resolute despite the rise in interest rates since last year. While market volume has shown good growth during the period, this has also been accompanied by a rise in prices.
The weighted average price of residential units in Ahmedabad increased by 4% YoY to INR 3,031 per sq ft in 2023. The market is India’s most affordable amongst the top 8 cities. This distinction can be predominantly ascribed to the government’s initiatives in urban planning, which are directed towards accommodating the growing population of the city. Starting from 2006, the municipal area of the city has undergone substantial expansion, increasing from 186 sq km to its current extent of 466 sq km. This expansion has played a pivotal role in achieving a balance between the increasing population and the built-up area of the city.
The office market of Ahmedabad registered transaction volumes of 1.8 mn sq ft in 2023. Office space completions grew by 34% from 1.4mn sq ft in 2022 to 1.9mn sq ft in 2023. India facing business remained the dominant occupier in the city.
Residential Market Update: January – December 2023
The city saw a rise in the momentum of residential activities with sales as well as launches posting YoY rise. Launches recorded in the city were at decadal high in 2023 at 22,497 units. 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 weighted average price of residential units in Ahmedabad increased moderately by 4.5% YoY to INR 3,031 per sq ft.
AHMEDABAD RESIDENTIAL MARKET SUMMARY
| Parameter | 2023 | 2023 Change (YoY) |
| Launches (housing units) | 22,497 | 8% |
| Sales (housing units) | 16,113 | 15% |
| Average Price in INR/ sq ft | (INR 3,031) | 4.5% |
Note: 1 square metre (sq m) = 10.764 square feet (sq ft), Source: Knight Frank Research
Due to consistently having the most economical residential prices per square foot among the top eight markets, Ahmedabad has traditionally witnessed most of its sales in the affordable category of INR 5 million and below. However, a notable shift has become apparent in the latter half of 2023, as the overarching trend of heightened sales in the mid and premium categories has started to rival those in the affordable segment, marking a significant change in Ahmedabad’s real estate landscape. In terms of the share of sales of the three ticket-size segments, the shift in demand for units of INR 5-10 mn category, from 29% in 2022 to 35% in 2023 has been sizable. Units priced above INR 10 mn also witnessed an increase in share of total sale from 10% to 14% during the same period. Conversely, there has been a decrease in the share of sales with ticket sizes <INR 5 mn from 61% in 2022 to 51% in 2023.
Ahmedabad ticket size split comparison of sales during 2022 and 2023
Source: Knight Frank Research
During 2023, the city witnessed a growth of 59% YoY in sales of units priced above INR 10 mn. The ticket size between INR 5mn-10mn saw a growth of 23% YoY while that below INR 5mn saw a drop of -5%
Ticket-size split of sales
| Ticket Size Categories | <5 mn | 5-10 mn | 10 mn> | Total |
| 2023 | 8,181 | 5,715 | 2,218 | 16,113 |
| YoY % change | -5% | 41% | 59% | 15% |
Source: Knight Frank India
Balbirsingh Khalsa, Executive Director, Industrial & Logistics and Branch Director – Ahmedabad, Knight Frank India said, “Ahmedabad has historically stood out as the most cost-effective market among the leading eight cities. The city has a proven track record of efficient planning that has effectively met the growing population’s increasing needs over the past several years. High affordability, comparatively lower prices per square foot, and an improving local economic environment remain compelling drivers for the Ahmedabad residential real estate market and should help support market volumes in the following year.”
Office Market Update: January – December 2023
Occupier demand remained strong in the Ahmedabad office market as 2023 ended the year on a high note with H2 2023 scaling a new high in terms of transacted volumes. While the annual transacted area in 2023 was 15% lower in YoY terms, it exceeded pre-pandemic levels by a large margin. The average transacted rent saw a growth of 4.2% YoY to INR 42 per sq.ft/month.
AHMEDABAD OFFICE MARKET SUMMARY
| Parameter | 2023 | 2023 Change (YoY) |
| Completions in mn sq. m (mn sq ft) | 0.18 (1.9) | 34% |
| Transactions in mn sq. m (mn sq ft) | 0.17 (1.8) | -15% |
| Average transacted rent in INR/sq. m/month
(INR/sq ft/month) |
450 (41.8) | 4.2% |
Note: 1. 1 square metre (sq m) = 10.764 square feet (sq ft), Source: Knight Frank Research
Throughout the year, India facing business remained the key driver of market activity, constituting 73% of the total transacted volume in the city. Occupier demand in this category was well distributed across BFSI, IT/ITES, Manufacturing and other service sectors signifying the broad-based demand for setting up India facing businesses during the period. The flex office spaces ranked second constituting 18% of the total transacted volume in Ahmedabad.
| End-User Licensee/Buyer | GCC | India-Facing Business | Flex | Third Party IT | Total |
| Area transacted in mn sq ft | 0.1 | 1.3 | 0.3 | 0.1 | 1.8 |
Source: Knight Frank Research
Balbirsingh Khalsa, Executive Director, Industrial & Logistics and Branch Director – Ahmedabad at Knight Frank India said, “Occupier demand has surged in the Ahmedabad office market over the last two years. The consistent support from the state and central governments, increasing prominence of GIFT City with the establishment of the International Financial Services Centres Authority (IFSCA) in 2020 are important drivers contributing to the positive shifts in business dynamics in the city. The comparatively higher grade of office spaces being developed here along with the growing infrastructure has also attracted the occupiers’ focus in recent times.”
