Ahmedabad Builders Embracing Joint Ventures Deal in Ahmedabad to Combat Soaring Land Prices

Ahmedabad Developers Embrace Joint Ventures to Combat Soaring Land Prices. Ahmedabad’s real estate market is undergoing a significant shift. With rising land costs, developers increasingly turn to joint development agreements (JDAs) with landowners to launch new projects. Ahmedabad Builders Embracing Joint Ventures Deal in Ahmedabad to Combat Soaring Land Prices

Key Factors:

• Jantri rate hikes: The recent increase in jantri rates (government land valuation rates) has significantly driven up land acquisition costs.
• FSI charges: The rise in jantri rates is coupled with an increase in Floor Space Index (FSI) charges, further squeezing developer margins.

Shifting Strategies:

• Reduced upfront costs: Partnering with landowners through JDAs allows developers to share the burden of land acquisition, reducing their initial financial investment.
• Landowner benefits: Landowners potentially gain higher returns through profit sharing compared to traditional land sales.

Examples:

• Bakeri Group: This leading developer has partnered with a landowner group for a new 5 lakh sq ft residential complex in Shilaj. This marks their first JDA project.
• Shivalik Group: They have finalized a JDA for a 30-story commercial project spanning 10 lakh sq ft at Vaishnodevi Circle.

Impact and Outlook:

• This trend signifies a strategic shift in Ahmedabad’s real estate market.
• JDAs are expected to become more prevalent as developers and landowners seek mutually beneficial solutions in the face of rising costs.
• This collaborative approach has the potential to reshape the city’s property market and ensure financial viability for all stakeholders.