Owning real estate in Ahmedabad may gradually become even more attractive over the next few years if certain measures are taken today. Although property in Ahmedabad does not elicit as great interest as property in larger metros and commercial centers, this shall gradually change as certain industries in the city gain steam and become abreast with modern business practices.
Even though India recently added another startup, Hike, to its already existing nine, Ahmedabad cannot boast of a single unicorn. To bring about a change in the startup culture in Ahmedabad, the local authorities should promote certain conditions which make Ahmedabad a more attractive destination for startups than other larger metros. One quality which makes Ahmedabad an attractive destination is the far lower costs startups in the city have to pay to rent a great office. The cost of an elegant office in Ahmedabad can be nearly half of that in Bangalore. This fact should be promoted by the local government to entrepreneurs.
Another factor which is a barrier to growth in Ahmedabad is that much of the business in Ahmedabad is still conducted in a traditional fashion which covets debt and shies away from equity. Some younger and first-time entrepreneurs in Ahmedabad are embracing a more modern and cleaner growth model which is expected to lead to rapid growth and expansion of their startup. The use of more sophisticated financial instruments to aid in growth along with the use of fresh technology bodes well for many such new entrepreneurs and their businesses.
Although much of the drive towards modernity is driven by relatively young businesspeople in startups, older businesses along with real estate developers in Ahmedabad are also likely to benefit by using equity rather than debt to finance their projects.
Even though Gujarat is one of the richest states in the country, a great deal of business in the state is often conducted in an outmoded fashion and exchange of money is done in cash and lines of credit are drawn from informal lenders. This is in stark contrast to cities such as Bangalore where entrepreneurs are financially savvy and understand the advantages of equity in a business and embrace buying and selling by digital transactions. As young entrepreneurs in Ahmedabad shrug off antiquated business practices and replace them with more modern one’s, business and property in Ahmedabad shall be the beneficiaries.
The free flow of money is essential to a thriving economy; the flow of currency to the most optimum business allows innovative ideas to succeed and punishes businesspeople with flawed business models. For Ahmedabad to become as great a success story as Bangalore, Ahmedabad’s business community needs to become more open to change and use the nation’s capital markets to raise funds.
Such changes may lead some families to relinquish some autonomy in conducting the affairs of their company yet over time will create far more wealth than simply using debt to finance projects does today. The top builders in Ahmedabad too shall benefit by exploiting capital markets to raise funds to build more elaborate apartments in Ahmedabad and in other cities in Gujarat as well. Already most luxury apartments in Ahmedabad cannot hold a candle to those in Bangalore, whereas three decades ago most would have found the quality of real estate in both cities to be virtually identical.
The need for affordable homes in Ahmedabad is crucial as well; as another obstacle to growth in Ahmedabad is the scarcity of world-class talent and to some extent skilled labor. Even though the best management school in the country is in Ahmedabad as is the best design institute, the well-educated graduates of these institutes are not attracted by business opportunities in Ahmedabad.
The lack of skilled and talented manpower is perhaps the greatest drawback to admirable growth in the cities technology sector. Most projects in Ahmedabad are built keeping in mind the requirements of frugal home buyers, but to attract top talent to the city, the government along with builders and developers in Ahmedabad shall need to promote the development of world class apartments and vastly improve the cities infrastructure and quality of affordable homes.