Prices are expected to return to their usual high in the current financial year: experts
It seems that commercial properties are coming out of the saturation period of the last two years.
The prices of these properties are still on the lower side by around 10% in the city compared to the situation a couple of years back, but experts believe that property prices are likely to go up during the current financial year.
The capital value of commercial properties in the city has not reached the level of prices quoted in 2007-08. The office space on CG road was priced in the Rs3500-Rs3750 per square feet in 2009-10. It was Rs3500-Rs4500 per square feet in 2007-08. Same is the case in other commercial areas, such as Ashram Road and SG Road.
The prices of ground floor retail space on Ashram Road and SG Road have crossed the price levels of 2007-08. In both the areas, the prices have shown an appreciation of around 18% and 5.5% in 2009-10 respectively, compared to that of 2007-08. Other than this, all segments have witnessed a downward trend.
The prices of commercial properties have risen by around 30% in the last financial year over the previous year. Interestingly, the capital values of commercial properties on Ashram Road have registered more growth compared to other areas of the city.
In 2009-10, the rates of properties on Ashram Road have increased by around 47% for retail space and 36% for office space, while the same was around 24% and 11% on CG Road.
Jaxay Shah, president of the Confederation of Real Estate Developers Association of India (Gujarat), said that there has been saturation in commercial space for the past two years. "The prices did appreciate, but not so much. However, there was also not enough supply, especially in the office space," he said.
He also said that there is huge potential for good office space in Ahmedabad, as the state is witnessing all-round activity in trade and commerce on theback of double digit growth in the economy for five years.
The year 2008-09 was not good for commercial properties as the rates declined on an average by around 25-30%, compared to the prices in 2007-08. First floor retail space on CG Road came under highest pressure. The prices there crashed by around 38%. The first floor retail space was quoted at Rs14,000 to Rs16,000 per square feet in 2007-08, which came down to Rs10,000 to Rs12,000 per square feet in 2008-09.
Shrenik Shah, chief executive (commercial) of Space Management Ltd, said that the commercial properties are witnessing
an upward trend. "The rates are likely to reach the 2007-08 level during the current financial year," he said.
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