Real estate development in GIFT City. Urban development Government of Gujarat

Transcription

1 Real estate development in GIFT City Urban development Government of Gujarat

2 Contents Project Concept Market Potential Growth Drivers Gujarat Competitive Advantage Project Information - Location/ Size - Infrastructure Availability/ Connectivity - Raw Material/ Manpower - Key Players/ Machinery Suppliers - Potential collaboration opportunities - Key Notes Project Financials Approvals & Incentives Key Department Contacts Page 2

3 Project Concept Conceptualization of Gujarat International Finance Tech (GIFT) City Prime Minister of India Shri Narendra Modi felt that the vision of Gujarat will be incomplete without capitalizing on the in-house business acumen. Hence he wanted to collaborate with technology and create a hub with world class infrastructure to meet the needs of modern India. Hence the conceptualization of the first of its kind International Financial Services Center (IFSC) in India. Need GIFT City Financial services sector contributes significantly to the Indian economy. The sector represents around 5% of the Indian GDP and will grow to 15% by Hence to tap the significant potential of the sector there was a need to create a hub of international standards. Gujarat International Finance Tec-City is one of the most ambitious projects ever undertaken in the Indian Infrastructure space. GIFT city is a global hub for Financial and IT Services on the lines of Global Financial Centres such as Singapore, Paris, Shanghai, etc. GIFT is located on the banks of river Sabarmati and is a financial Central Business District between Ahmedabad and Gandhinagar in Gujarat. The site is 12 km from the Ahmedabad International Airport and 8 km from Gandhinagar. Planning and development of GIFT City During the Vibrant Gujarat Global Investor Summit 2007, the idea of a city on the lines of International Financial Service Centre (IFSC) in India was mooted. Gujarat Internation Finance Tec- City Company Limited (GIFTCL) (A Joint Venture Company) Gujarat Urban Development Company Limited (GUDCL) (a Government of Gujarat undertaking) Infrastructure Leasing & Financial Services Company Limited (IL&FS) The development of the project is planned in 3 phases of 4 years each with a budgeted cost of Rs. 70,000 crores. The City is going to be a business hub attracting I.T. Tech firms, Banks, Stock Exchanges, Educational Institutions and others. Page 3

4 Project Concept Business Structure of GIFT City Multi Service SEZ with IFSC status Processing Area Non Processing Area Domestic Finance Center/Corporate Office/Trade Center Housing and Social facilities Schools (International & CBSE) and Training Centers Clubs, Hotels, Exhibition & Convention Center Hospitals and low income housing Benefits Fiscal incentives, regulatory freedom and supportive infrastructure provided by the Government because of SEZ lead to: Increase in both domestic and foreign investments Increased exports Large scale developments Low cost manufacturing hub Employment generation for both skilled and unskilled workforce Processing and Non Processing Areas Service apartments and residential flats IFSC Restaurants, food court Commodity Exchange Shopping centers, retail stores Global Trading Exchange Medical centre Insurance Entertainment centre, Theatres Offshore Banking Post Office, Telephone Exchange International Techno Park for IT/ITeS Police Station, Security Data centers and KPO/BPO Services Regulators offices Page 4

5 Market Potential Real estate industry in India As of 2016, the Indian construction industry is valued at US$126 billion employing more than 35 million people. The industry contributes more than 10% to India s GDP. By 2017, the sector is expected to grow to US$186.2 billion. By 2022, the sector would require a 76.5 million workforce. 100% FDI is permitted through the automatic route for cities, townships and infrastructure development. Key trends in real estate industry in India Real Estate Act passed by the Rajya Sabha in May 2016 will not only provide for a real-estate regulator but also put pressure on developers to change the traditional ways of managing funds, seeking approvals and completing projects. There has been a surge in the new housing units launched in Ahmedabad because of the positive sentiments in the market. Locations in Central Ahmedabad like Paldi, Naranpura and Vasana lead in new launches with a five-fold jump. Gujarat government government has stepped forward to provide world class infrastructure in various sectors like industrial parks and SEZs, roads, ports, urban infrastructure in sync with the Blueprint for Infrastructure in Gujarat 2020 (BIG 2020). In order to tap the potential of the financial services industry in India, Indian cities will have to provide global standards in infrastructure, office space, telephone and internet connectivity. The GIFT City site includes real estate development in the form of housing societies, recreational complex, schools and hospital. Key trends - financial services industry As India experiences continued economic growth, the financial services industry by itself can generate 11 million jobs by 2020 with an estimated USD425 billion in value added to GDP. As many as 0.5 million direct and 0.5 million indirect jobs will be created by the setting up of financial services and IT/ITeS companies in the GIFT City. The target business segments for GIFT are private banking, product development, microfinance, commodity trading, hedge funds, software application development and maintenance for BFSI verticals etc. Page 5

6 Market Potential Financial services industry Gujarat Growth in deposits & advances (USD billion) Deposits Advances Gujarat contributes ~30% of India s stock market capitalization, 16% to the country s total output and 19% to exports. Gujarat boasts of the highest amount of bank deposits on a per capita basis in the country. GIFT City: India s first international financial services centre (IFSC) An international financial services centre caters to customers outside the jurisdiction of domestic economy, dealing with flows of finance, financial products and services across borders. Since India has many restrictions on the financial sector, an SEZ can serve as a testing ground for an IFSC for financial sector reforms before they are rolled out in the entire nation Commercial banks are allowed to open IFSC banking units (IBUs) within SEZs, which are deemed as overseas branches. Institutes operational in GIFT City Yes Bank, Federal Bank, ICICI Bank, Kotak Mahindra Bank, IDBI Bank, SBI and IndusInd Bank which have started their IFSC banking units in the special economic zone at GIFT IFSC have together issued buyers credit, foreign currency borrowing and other credit facilities worth $1 billion in ten months since their operations. GIFT now targets to corner a share of the NIFTY derivative trades which are executed through the Singapore Stock Exchange. Some domestic banks like Bank of India, Syndicate Bank, Gujarat State Co-operative Bank and Janalakshmi Bank have also begun normal banking operations outside the SEZ. After banks, a few insurance companies are expected to start operations at GIFT IFSC. In the first phase 15 million square feet of built up area has been allotted in the GIFT SEZ and Non-SEZ area for development of office towers, residential apartments and social facilities. Page 6

7 Growth Drivers 1 Recognition from the Central Government GIFT City received recognition as an International Financial Services Center from the Finance Minister, Arun Jaitley, in the Union Budget The Union budget approved various tax exemptions so as to make the unit globally competitive. 2 Active Capital Market in Gujarat The natural inclination towards finance is a driver for the financial services center in the GIFT City. Traditionally Gujarat is a community of businessmen. It has a pool of trained manpower: CAs and commerce graduates. On an average Gujarat contributes 30% of stock market capitalization. 3 BIG 2020 Plan Blueprint for Infrastructure in Gujarat 2020 (BIG 2020), is an integrated plan for the state s infrastructure development. The state government has stepped forward to provide world class infrastructure in various sectors like industrial parks and SEZs, roads, ports, urban infrastructure. A huge investment of ~INR12,000 billion is envisaged. 4 Commercial and real estate development Development of smart cities has promoted commercial and residential development in the country. Increasing urbanization and the desire to live in smart cities is driving growth in the real estate sector and projects such as the GIFT City are coming up. 5 Booming financial services and IT industry The financial services industry in India is booming and hence there is a need for setting up financial centres of international standards. One of the motives that led to the formation of GIFT was to win back trades that have moved to offshore destinations like Singapore and Dubai and spur growth in India. Page 7

8 Gujarat - Competitive Advantage GIFT City: A single window clearance Gujarat International Finance Tech City Company Limited (GIFTCL) was incorporated to implement the GIFT City project and act as a single window clearance system. GIFT is the master developer of the city GIFT Urban development authority (GIFTUDA) constituted for well planned urban development of the area GIFT Notified Committee constituted for better management at the city level GIFT has power distribution license for GIFT area Strategic location advantage of GIFT City Centrally located in the state of Gujarat in Gandhinagar 12 km from Ahmedabad International Airport On the bank of River Sabramati Page 8

9 Gujarat - Competitive Advantage GIFT City site is centrally located in the state of Gujarat between Ahmedabad and Gandhinagar, on the bank of river Sabarmati. First mover s advantage The GIFT city is the first of its kind, only global Financial and IT Hub in India and hence enjoys world class facilities. GoI approved GIFT multi services SEZ is the first international Financial Services Center (IFSC) in India competing with the International financial centers in Shanghai, Paris etc. Effective connectivity of GIFT to rest of Gujarat Grid of six external gateways to NH-8 and state highways connecting GIFT City to various areas of Ahmedabad and Gandhinagar. Bus Rapid Transit System to GIFT Metro Rail Transport System to GIFT Employment opportunities in Ahmedabad Ahmedabad is Gujarat s largest business and trading hub. A surge in employment opportunities has attracted talent from across the country. Hence there is a sufficient supply of manpower not just for the real estate development of the GIFT City but also for financial services. High GDP growth of Gujarat Greenfield project Greenfield developments at GIFT City have acknowledged in the Mission Statement & Guidelines for Smart Cities released by Union Ministry of Urban Development in June These are required to address the needs of the expanding population. The smart city development at GIFT City is very different from retrofitting at existing cities. High Quality Infrastructure Gujarat has emerged as one of the leading industrial states and investment destinations. Gujarat s contribution to India s GDP is expected to grow from 7.4% in FY10 to 8.3% in FY20. By FY20, per capita income of Gujarat is expected to surpass that of Maharashtra. Infrastructure development is meticulously planned to ensure the best in world technology. District cooling system, automated waste collection system, utility tunnel, intelligent building and green city are some of the unique developments in the GIFT City. Page 9

10 Project Information Project at a Glance Project Name Location Area of the Estate Real estate development in GIFT City On the bank of river Sabarmati, between Ahmedabad and Gandhinagar 359 hectare/ 886 acre/ 3.58 sq km. Focus Sector Financial services and IT/ITeS services Project site Master plan area of GIFT City GIFT will spur development in the adjoining Gandhinagar and Ahmedabad region. Since it is a government authorized body it has the strategic advantage of faster implementation of projects. The allocated area of 886 acre will be used over a period of time. The site Land usage in GIFT City Land area in % Built up area distribution in % Commercial Transportation Utilities Social facilities Residential Green & open spaces Commercial Residential Social facilities Page 10

11 Project information Utilities ICT District cooling system Overall vision Create leading edge infrastructure, services and platforms. Offer financial services and IT/ITes enterprises a significant competitive advantage to operate regionally and globally. Current status: British Telecom has developed the overall concept, master plan, high design of ICT services including Data center. A state of art certified Tier 4 green data center with a capacity of 900 racks is up and running. Entire GIFT City is connected with a fault tolerant optical fibre ring infrastructure. Overall vision District cooling system is introduced for the first time in India for any commercial use. Chilled water will be supplied till building level and will reduce energy, maintenance cost, reduce noise and vibrations and improve air quality. Current status: Work assigned to M/s ETA Engineering Pvt Ltd, an agency from Dubai on EPC basis. India s first District cooling plant of 10,000 TR capacity is operational. Automated waste collection system (AWCS) Overall vision AWCS will maximize resource recovery, minimize emissions, minimize impact on the environment, human intervention, space requirement, impact on health hazard. There will be no waste visibility which will make city clean, green and healthy. Current status: Work assigned to Envac, a reputed agency from Sweden. Construction work for central waste handling facilty of 5 to 50 TPD capacity is operational. Overall vision Utility tunnel All utility services except gas and sewerage from plants to various buildings will be routed through utility tunnel only. GIFT is planned to develop utility tunnel throughout city including DTA and SEZ areas. Current status: For Phase-I, construction of utility tunnel of 2.2 km length in DTA is completed. MEP tender awarded to Blue Star Ltd. for Phase II. M.S Khurana Engineering Ltd will commence the construction of utility tunnel of 4.5 km. Page 11

12 Infrastructure availability/ connectivity Road Rail Distance between Ahmedabad railway station and Gift city is 29 km. Distance between Gandhinagar railway station and GIFT city is 15 km. Proposed: Surface roads (4+4 lane) Pedestrian pathways and emergency vehicle roads Bridges and public transport system Travellators Page 12 Port Gujarat Maritime Board plans to set up a maritime cluster in GIFT city by The cluster will house maritime-related service providers such as ship owners, shipping agents, ship chandlers, shipping finance and insurance firms and maritime education institutes. Utilities Overall vision Water Water in GIFT City will be drinkable from any tap. Storage of surface run-off and rainwater will be done. Water infrastructure will consist of world class water treatment and sewage treatment plants (WTP and STP).. Current status: Construction of raw water pumping station and water supply transmission main pipeline to GIFT zone from Narmada Canal completed. Works for WTP and STP have been assigned to M/s Voltas Ltd. WTP is operational and STP is completed. Railway line passes by GIFT city on the west (to Delhi) and east (to Himmatnagar) Proposed Gandhinagar Ahmedabad - Dholera metro rail project proposes connectivity to GIFT city under phase 1 extension of 10Kms. Power Overall vision Air Ahmedabad international airport is at a distance of 12 Km from GIFT city. Proposed: International airport at a distance of 80 Km from Ahmedabad and 20 Km from Dholera SIR. GIFT City ensures 99.9% power availability or an outage of 5.3 minutes per annum. Current status: 66 kv substation of 20 MVA commissioned and new tenders for capacity augmentation are in progress. Power distribution network for all existing buildings and plants commissioned. Process for second live feed of grid is in progress. Street light network for all main roads completed.and remaining street light work is in progress.

13 Project Information Allotments in GIFT City Company Purpose Area(in mn sq ft) IL&FS Office, Residential & Social 7.77 World Trade Centers Association Office & residential building 1 State Bank of India Local headquarter & residential building 0.4 LIC India Office building 0.2 Brigade Group Office, Residential & Hotel 1 Tata Communications Tier IV Data Center 0.1 Brokers forum BSE Tower 0.5 Global Skill and Knowledge Foundation Global Insurance Training 0.2 B.U. Bhandari Landmarks Office & residential building 0.75 Jamnabai Narsee School ICSE School 0.1 Sangath IPL Residential tower 0.15 Reliance Capital Office & residential building 0.5 Sterling Hospitals 200 beds hospital 0.25 Janaadhar Affording housing development 0.14 Hiranandani Office building 0.3 Prestige Group Office building 0.3 Savvy Office building 0.4 IT/ITeS companies in GIFT City MNC players like Oracle, Maxim Integrated and BeFree (a leading book-keeping company from Australia) have their presence in the GIFT City. Companies like QX Corporate, Iship Design and Accvell Technologies have established their presence in the SEZ Area of GIFT City for export of various IT enabled services. Page 13 *Manpower is estimated on the basis of employment at the existing facilities across India

14 Project Information Key project updates Construction work of Gujarat s 1 st World Trade Center, the signature tower by Hiranandani, affordable housing project by Jannadhar Pvt Ltd and business club is in full swing. India s leading stock exchanges namely BSE, NSE, NCDEX, ICEX & MCX have signed a MoU with GIFT City to develop their international exchanges at GIFT SEZ-IFSC. Sh. Arun Jaitley, Union Minister for Finance, unveiled regulatory framework for IFSC in India in April SEBI & RBI board in March 2015 and IRDA board in April 2015 approved the operational guidelines on IFSC. Potential Collaboration Opportunities In line with the Public Private Partnership philosophy, the project is encouraging significant private sector participation into specific components. Implementation Framework: Site development and basic infrastructure will be contracted by GIFTCL keeping in mind the latest construction technology. Special purpose vehicles have been set up to implement the critical utility components through major private sector participation. GIFT District Cooling Systems Limited GIFT Water Infrastructure Limited GIFT Waste Management Services Limited GIFT SEZ Limited GIFT Power Company Limited GIFT ICT Services Limited Key considerations Walk to work concept: GIFT City promotes the concept of walk to work. Transit oriented development is concentrated near transit stations located at 4 locations so as to make travel convenient for people. RBI to take call on liberalized remittance scheme for local investors: The new RBI Governor, Urjit Patel, would have to take a call on whether local investors would be allowed to use the LRS scheme to trade derivatives once stock exchanges go live in the IFC. He will also have to take a call on whether to allow trading of rupee-dollar futures contracts outside the domestic trading area. Expectation around the project: Since the project is the first of its kind in India, there is not just a lot of expectation around the project nationally but internationally too. The benchmark of international standards have to be met by the developers and the companies setting up units in the city. Page 14

15 Project Financials Private investment (in INR crore) in GIFT- Phase 1 development: Commercial 6835 Residential 2800 Social 900 Total 10,535 Current Pricing Policy in GIFT City Project Commercial terms for GIFTCL Development rights consideration (Rs. per sq ft of BUA) Lease rent (Rs. per sq mt of leased land per annum) City maintenance charge (Rs. per sq ft of BUA) Commercial building (in INR) Residential building (in INR) Social facilities (in INR) Commercial terms for GIFTSEZ Development rights consideration (Rs. per sq ft of BUA) Lease rent (Rs. per sq mt of leased land per annum) City maintenance charge (Rs. per sq ft of BUA) Commercial building (in INR) Residential building (in INR) 1250* 950* 625* Social facilities (in INR) Payment Schedule for GIFTCL: 10% within 10 days of issue of letter of allotment 15% within 30 days of issue of letter of allotment 25% within 12 calendar months of issue of letter of allotment 25% within 12 calendar months of issue of letter of allotment Balance 25% within 36 calendar months of letter of allotment or completion of work whichever is earlier. * Applicable up to December 31, 2016 Page 15

16 Approvals & Incentives Incentives Reduction in Minimum Alternate tax Minimum Alternate Tax (MAT) reduced from 18.5% to 9% in IFSC as per the Union Budget 2016 Exemption of Stamp Duty 100% exemption from payment of Stamp Duty to the share broking transactions of share brokers who establish their registered office in GIFT City STT, DDT and LTCG waived off Union Budget 2016 has waived off security transaction tax, commodity transaction tax. Taxes on distribution of dividends and long term capital gains have also been waived off. Scheme of assistance for IT/ITeS companies Incentives will be given to IT/ITeS companies setting up offices in GIFT as per the IT/ITeS Policy Approvals Land requirement for the project has been fulfilled by the Government of Gujarat. For infrastructure requirements GIFTCL is solely responsible. The Union government has released the tax incentives and other clearances in the Union Budget However there are a general procedural requirements. Prior permission requirement Pre construction Post construction Post occupancy Any person intending to carry out any development in GIFT SEZ will make an application to the Competent Authority with Letter of Allotment 1. Development permission application 2. Commencement certificate 3. General notation 4. Scrutiny fee Occupancy certificate No alterations in structure/ change in use will be allowed post occupancy. Inspections & structural audit will be carried out. Page November 2016

17 Gujarat International Finance Tech Company Ltd Department of Tourism, Gujarat Infrastructure leasing & financial services Ltd indextb - Industrial Extension Bureau This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope. It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision. Block No.6, 5th Floor, Udhyog Bhavan, Sector No. - 11, Gandhinagar CIN : U75140GJ1999SGC Telefax : / 128, / 66 Fax Exten. : contact@gudcltd.com