Here’s why the real estate market in Gujarat’s GIFT City is high on the liquor consumption policy - Hindustan Times
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Here’s why the real estate market in Gujarat’s GIFT City is high on the liquor consumption policy

ByMehul R Thakkar
Jun 18, 2024 12:27 PM IST

Gujarat's GIFT City Liquor policy has led to prices of housing units going up by 10% to 20%, according to real estate experts

After the Gujarat government relaxed its more than 60-year-old liquor prohibition law and issued guidelines permitting liquor consumption in hotels, restaurants and clubs offering ‘wine and dine services’ in GIFT City, housing and land prices in the area have gone up by 10% to 20%. This has also led to several non-resident Indians investing in housing projects in the fintech hub.

The liquor policy announced by the Gujarat government partially permitting liquor consumption in GIFT City has led to an increase in housing prices. (File Photo)
The liquor policy announced by the Gujarat government partially permitting liquor consumption in GIFT City has led to an increase in housing prices. (File Photo)

The decision to relax liquor consumption is significant as the state of Gujarat is a dry state.

What is Gujarat govt's GIFT City Liquor policy?

The Gujarat government in December 2023 announced that it is allowing people working in GIFT City along with their official guests to consume alcohol in licensed hotels, restaurants and clubs in the fintech hub. The government allowed serving of liquor in designated areas only to liquor access permit or temporary permit holders.

All about GIFT City in Gujarat

Gift City also known as Gujarat International Finance Tec-City is located on the banks of Sabarmati River between Ahmedabad and Gandhinagar in Gujarat. The Gift City is spread over 880 acres and includes a special economic zone (SEZ). GIFT City is broadly divided into an SEZ that includes financial institutions, banks and non-SEZ area that includes commercial office spaces and residential buildings. Of the total 880 acres, around 30% of the GIFT City is currently operational and around 30% of the total area is reserved for residential projects, according to property consultants.

Also read: Gujarat allows liquor in GIFT City for employees, official guests

Here’s how property prices stack up in GIFT City after the relaxation in liquor policy

There has been an almost 74% increase in property prices in GIFT City in the last five years. Before COVID-19 pandemic, land prices in the area were around 4,300 per sq ft and increased to 7,500 per sq ft by Q1 2024-end, according to data shared by ANAROCK, a real estate consultancy firm.

Residential rentals have also jumped by 40% from 25,000 per month to 35,000 per month as on Q1 2024-end. Commercial office space rentals in GIFT City have seen a 32% increase in the period while residential capital values have risen by 74% – from 4,700 per sq ft in 2019 to nearly 8,200 per sq ft by Q1 2024-end.

GIFT City has witnessed a new record in development rights prices as a tender floated for residential project in SEZ recently saw a bid of 6,557 per sq ft for development of 5.22 lakh sq ft on a plot measuring 5,500 sq meters, according to news reports.

"If we are to consider trends post Gujarat government’s partial approval for alcohol consumption (December 2023) in GIFT City region, there has been some uptick in the overall prices. For instance, land values have seen a 7% increase in one quarter – from 7,000 per sq ft as on 2023-end to nearly 7,500 per sq ft as on Q1 2024-end. Similarly, residential rentals have seen a 3% jump while commercial office space rentals have witnessed a 2% increase," said Prashant Thakur, Regional Director and Head – Research, ANAROCK Group.

Also read: GIFT City: From Mumbai impostor to big boy in big biz

How has the liquor policy helped GIFT City’s real estate market?

According to real estate experts from Gujarat, the liquor policy announced by the Gujarat government partially permitting liquor consumption in GIFT City resulted in an increase in residential real estate sales. In the last six months, developers too have increased prices following the rise in demand for properties in the area, said real estate consultants active in the area.

"The inflow in GIFT City over the last few years has been increasing. There are multiple triggers to why capital and rental values of commercial properties in SEZ and non-SEZ areas have also increased. These include recent incentives by the government such as relaxed regulations, exemptions and a new liquor policy," said Abhishek Bhutani, Managing Director Logistics and Industrials, Ahmedabad, Cushman & Wakefield, a real estate consultancy firm.

"We are witnessing significant growth in both commercial and residential property values in GIFT City. Commercial office space lease rates range from 60-80 per sq ft in the SEZ area and 50-65 per sq ft in the non-SEZ area. In the residential sector, one of the triggers that has led to a spike in property rates is the recent announcement regarding partial relaxation in liquor consumption norms. Residential prices have seen a 5-20% increase since the new liquor policy was announced, with apartments now touching 10,000 per sq ft on super built up," he said.

Liquor consumption in hotels, restaurants and clubs offering ‘wine and dine services’ in GIFT City a boon for investors

According to real estate experts, the residential real estate market in GIFT City has seen an uptick from investors ever since the government permitted liquor consumption in hotels, restaurants and clubs offering ‘wine and dine services’.

Several investors have purchased flats in the area as a result of which prices have gone up in the last few months post the policy announcement, said Swapnil Anil, Executive Director and Head, Advisory Services, Colliers India, a real estate consultancy firm.

Projects in GIFT City comprise 2 BHK to 5 BHK apartments and there is an increase of around 10 to 20% in both capital and rental values, property consultants from Gujarat told HT Digital.

"The commercial real estate market benefits from various other policy decisions including permits for alcohol consumption for employees by the Gujarat government. Earlier, only those working in the area were permitted to purchase apartments in GIFT City, but now it’s open to outsiders as well. All these factors, including the wine and dine policy, have helped the GIFT City real estate market,” said Swapnil Anil.

Also read: Maharashtra votes 2024: Why is the state losing big projects to Gujarat?

Tax sops attracting corporate entities to GIFT City

According to Niranjan Hiranandani, chairman, Hiranandani Group, improvement in connectivity, social amenities, and civic infrastructure has led to price appreciation in GIFT City over a period of time.

"The tax advantage and other fiscal benefits have attracted corporate entities to establish their setup in the Gift City. Growth of the residential market in peripheral cities like Ahmedabad has attracted a talent pool to relocate for better employment opportunities," Hiranandani said.

Currently, companies like Morgan Stanley, JP Morgan, IBM, Oracle, Google among others have a presence in GIFT City. In terms of real estate developers, Bengaluru-based Sobha, Brigade Group and Mumbai-based Hiranandani Group have a presence there along with several Gujarat-based firms such as Shivalik, Nila Spaces.

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